Acadia Pharma May No Longer Be a Buy Ahead of NDA Filing

Piper Jaffray analyst Charles Duncan downgraded ACADIA Pharmaceuticals Inc. ACAD from Overweight to Neutral, noting that the "next steps may be more challenging." At the same time, the analyst updated his price target to $48 from $39 prior.

Duncan said that he is also concerned that the company will need additional financing to drive the "launch and uptake" of NUPLAZID, a drug used for psychosis in patients with Parkinson's disease. That expense, combined with a "lack of near-term upside catalysts," should worry investors.

Duncan said that the New Drug Application (NDA) Filing with the FDA is on track, with the filing expected this year. Management has been bullish on the company's antipsychotic, saying that the rate of mortality and serious adverse events is not impacted by adding ACADIA's treatment.

However, Duncan said that, given that success, the firm is a "bit surprised an offer for the company hasn't materialized." One possible reason is that the regulatory agencies "may look carefully at these data" and provide more scrutiny. He added that acquisition speculation is a risk to the firm's Neutral rating.

Today, ACADIA has fallen 13.5 percent at writing, down $6.12 to $39.03. Back in March, the company experienced a similar dip before regaining ground throughout April and into the summer. Despite the steep decline, the stock is still higher by more than 23 percent on the year, above the 20 percent gain in the iShares NASDAQ Biotechnology Index IBB.