Rumors Swirl Again Over AstraZeneca PLC and This $4.4 Billion San Diego Biotech

Rumors Swirl Again Over AstraZeneca PLC and This $4.4 Billion San Diego Biotech September 8, 2017
By Mark Terry, Breaking News Staff

Rumors are rising that AstraZeneca is considering buying San Diego-based Acadia Pharmaceuticals .

The Evening Standard writes, “Acadia, which is 21%-owned by biotech-obsessed hedge fund Baker Brothers, has the only FDA-approved drug to treat hallucinations by Parkinson’s disease sufferers. Baker Brothers is said to be unwilling to sell for less than $55 a share. The shares are trading at $35, but were as high as $50 in 2015.”

Interest in Acadia isn’t new. Back in April, before Nuplazid was approved, but after the U.S. Food and Drug Administration (FDA)’s Psychopharmacologic Drugs Advisory Committee (PDAC) had voted to recommend it, speculation had mounted. At that time, Biogen was ranked as the top candidate because of its overlap. Biogen dominates the multiples sclerosis (MS) market, has three Alzheimer’s drugs in its pipeline, and Nusinersen for spinal muscular atrophy (SMA), as well as a drug for Parkinson’s disease (BIIB054) in trials.

In addition to PD and Alzheimer’s, the drug is being investigated for schizophrenia inadequate response, negative symptoms of schizophrenia, and major depressive disorder. If the Baker Brothers and the company itself think any of these indications might hit, the stock could take off, which would drive up any acquisition price.

Other sources have suggested Pfizer as a possible buyer.

On August 8, Acadia released its second-quarter financial results. In the second quarter, it reported $30.5 million of net product sales for Nuplazid for Parkinson’s psychosis, which is only likely to grow. Nuplazid is also being tested for Alzheimer’s disease psychosis, which is an even larger market. It had positive data from its Phase II trial and is expected to launch its Phase III trial for that indication soon.

Acadia is currently trading for $36.91. The company’s market cap is around $4.4 billion.

It’s hard to say whether a deal for the company will gain any traction. The upside of Nuplazid is pretty high and a lot of companies would like a piece of the Alzheimer’s market, so interest is strong.

MarketRealist notes, “The company has focused its resources on successfully executing the commercial launch of the drug for the approved indication in the U.S. While one million patients in the U.S. are currently afflicted with PD, around 40 percent of these patients suffer from PD psychosis involving hallucinations and delusions. PD psychosis is expected to affect half of PD patients over their lifetime. These statistics highlight the severity of the condition and untapped market potential for Nuplazid.”

In September, of the nine analysts that cover Acadia, two gave it a “strong buy,” six gave it a “buy” and one rated it “hold.”

MarketRealist also writes, “Wall Street analysts have forecasted Acadia Pharmaceuticals’ revenues to reach ~$113.3 million in 2017, which represents year-over-year growth of ~553.5 percent. Acadia Pharmaceuticals also expects to report revenues in the range of $105 million to $115 million for full-year 2017. If the company manages to surpass these revenue projections, it could benefit its stock as well as the iShares Nasdaq Biotechnology ETF (IBB). Acadia Pharmaceuticals makes up about 0.71% of IBB’s total portfolio holdings.”

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