What: Shares of ACADIA Pharmaceuticals (NASDAQ: ACAD), a clinical-stage biotech with a focus on neurological disorders, fell more than 14% today after reporting second quarter results.
So what: Expense continued to rise at the company as it prepares for its first New Drug Application, or NDA, submission to the FDA for its lead compound Nuplazid, which is designed to treat Parkinson's disease psychosis.
Net loss for the quarter came in at $39.4 million, which was up significantly from the $21.5 million net loss reported during the same time last year. On a per share basis the net loss was $0.39, which was worse than the $0.33 that analysts were expecting.
These results caused a few analysts to revise their ratings today, as Piper Jaffray downgraded the stock to 'neutral' with a price target of $48, while Needham reiterated its 'buy' recommendation and increased its price target to $49. This activity appears to be the main reason for the stocks strong movement today.
Now what: During the call management confirmed that its NDA submission is ready to go, but that it will not happen until its manufacturing quality systems are firmly in place. The company reaffirmed that it is still planning to submit the NDA in the second half of the year, and stated that the company is making good progress as it prepares itself for a commercial launch.
Acadia's stock has been on a stellar run for quite some time, and has surpisingly kept its upwards trajectory going even after management announced that its NDA submission would be delayed until the second half of the year. However, Wall Street's patience for the stock appears to be finally wearing thin, causing today's price action.
Nuplazid still appears to hold huge commercial potential and insiders still hold a significant amount of stock. While waiting for the company to file its NDA continues to require patience, I think it's good that the company wants to ensure it has its ducks in a row before it makes the leap to become a commercial organization. If you were bullish on Acadia's stock before today's announcement, I see no reason to change your position.