Insights

Why Acadia Pharmaceuticals Stock Is Crashing Today

What happened

Shares of Acadia Pharmaceuticals (NASDAQ: ACAD) were crashing 35.4% as of 11 a.m. ET on Tuesday. The steep decline came after a Food and Drug Administration (FDA) advisory committee voted 9-3 against recommending approval of pimavanserin in treating Alzheimer’s disease psychosis.

This vote was reported on June 17. But the trading of Acadia stock was halted that day because of the FDA advisory committee’s deliberations. Trading of the biotech stock didn’t resume until today since the stock market was closed on Monday for the federal Juneteenth holiday.

So what

The FDA’s Psychopharmacologic Drugs Advisory Committee (PDAC) determined that the data for pimavanserin didn’t sufficiently demonstrate that it was effective in treating hallucinations and delusions experienced by patients with Alzheimer’s disease psychosis. CEO Steve Davis said that the company was “disappointed” with the advisory committee’s vote.

Acadia still has a chance of winning approval. The FDA doesn’t have to go along with the PDAC’s recommendation. Davis said that Acadia will cooperate closely with the FDA as the agency completes its review.

However, the odds certainly appear to be stacked against Acadia at this point. An FDA rejection would seriously hurt the company’s growth prospects. It already markets pimavanserin under the brand name Nuplazid for treating Parkinson’s disease psychosis. The addition of a second indication would significantly expand the drug’s addressable market.

Now what

The FDA set a PDUFA date of Aug. 4 for its approval decision on pimavanserin in treating Alzheimer’s disease psychosis. Acadia’s next steps will hinge on the outcome of the agency’s review.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex Securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here To Get Started
FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here For More Info