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Why Parkinson's Disease-Focused ACADIA Pharmaceuticals is Soaring Today

By Brian Feroldi - Sep 3, 2015 at 12:27PM

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The company officially submitted a New Drug Application to the FDA for its lead compound Nuplazid, and investors cheered the news.

What: Shares of ACADIA Pharmaceuticals (ACAD 4.92%), a clinical-stage biotech with a focus on neurological disorders, were up more than 12% at one point today (but have since settled down) after the company announced that it filed for FDA approval of its key compound. 

So what: Acadia has officially submitted a New Drug Application, or NDA, to the FDA for approval of Nuplazid, which the company has studied as a potential treatment for Parkinson's Disease Psychosis. In clinical trials, Nuplazid was successful in meeting all of its primary and secondary endpoints, and the company believes that the drug offers hope to the millions of patients around the world who suffer from this awful disease. 

Now what: Investors have been bidding up Acadia's stock for years now, and surprisingly enough the stock still managed to move higher during the summer despite the company announcing that they were delaying the submission of Nuplazid from the first half of the year to the second half, noting that they needed more time to properly prepare the company for commercialization. 

I think investors were right to bid up the stock today as seeing Nuplazid officially pending FDA approval removes a small amount of uncertainly from the company's future, which always makes investors feel better about a company's prospects.

The FDA has already granted Nuplazid the much-coveted "breakthrough therapy" designation, and considering that patients who have Parkinson's Disease Psychosis currently have no real treatment options, sales estimates for Nuplazid look huge. Currently, analysts are expecting the drug to eventually reach more than $2 billion in peak sales. 

Acadia has been an absolute dream stock for its long-term investors, and with its NDA submission officially behind it, it's no wonder that investors are excited today. If Nuplazid can successfully make its way through the FDA approval process, then it's highly likely that investors may continue to see huge gains in the company's stock.

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