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Roth initiates coverage of Acadia with a buy

May 24, 2012 by · Leave a Comment 

Roth Capital Partners has initiated coverage of Acadia Pharmaceuticals (NASDAQ:ACAD) with a “buy” rating and a $3 price target, saying the key driver for the company is the late-stage asset, pimavanserin, for psychosis in Parkinson’s disease.

“Material changes from earlier trials give the drug a much better chance to show efficacy in its current Phase 3 study,” writes analyst Robert Hazlett, noting pimavanserin has a “good chance
with the current study, as the trial has been modified to better characterize patients suffering from Parkinson’s-specific psychosis.”

He notes that 40% to 60% of the four million Parkinson’s patients worldwide experience psychosis. “With pimavanserin well tolerated, and nothing else approved in the U.S. for the condition, we believe the therapy can be widely considered, providing a potential well over $1 billion worldwide.”

If the current trial is successful, the company would follow up with a trial of similar design, which would be used to support an NDA in 2015, with approval a year later.

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