Acadia Pharmaceuticals (ACAD) announced that it had achieved positive results from a pivotal study known as ADVANCE using its drug pimavanserin to treat negative symptoms of schizophrenia. The initial market reaction was mixed, based on narrowly achieving statistical significance. However, an opportunity exists to move forward. On top of that, Nuplazid has already been approved by the FDA to treat hallucinations and delusions associated with Parkinson’s disease psychosis. Sales of Nuplazid continue to increase year over year. Ultimately, I believe that a second pivotal study, which could adequately change trial variables, should help improve the next set of clinical outcomes for treating patients with negative symptoms of schizophrenia. Lastly, there is another major catalyst opportunity for the company as well. That’s because it is going to present final data from its phase 3 HARMONY study using pimavanserin to treat patients with dementia related psychosis.
Mixed Results Does Not Mean Automatic Failure
The pivotal study was known as ADVANCE. It was a 26-week study that recruited a total of 403 patients who had negative symptoms of schizophrenia. Schizophrenia is a disorder that affects a person’s ability to feel, think and behave clearly. This is further broken down into two types of schizophrenia. They are positive symptoms and negative symptoms. Positive symptoms would be racing thoughts, delusions and hallucinations. On the flip side, there are negative symptoms where a patient lacks enthusiasm, nonexistent social ability and lack of emotion.
As I will describe below, the results were good in that the primary endpoint was met. Where criticism comes from is that it was barely met. However, I must say that there are two important items to point out here. The first is that this study was designed in such a way where only 53.8% of patients had been randomized to take 34 mg (the highest dose). As you can imagine, that left about 44.7% of patients who took the lower 20 mg dose. Then, about 1.5% of patients who took the lowest dose of 10 mg. I can see the point of doing this as part of a dose escalation portion of a study, but in hindsight, maybe the study itself should have primarily been done with the 34 mg dose of pimavanserin. Moreso, I would like to see dose escalation and testing of various doses completed in phase 1 studies. I don’t think it is preferred to attempt multiple doses for pivotal studies. Nonetheless, this study did achieve the primary endpoint for the entire population.
The primary endpoint was a change from baseline to week 26 on the Negative Symptom Assessment-16 ((NSA-16)) total score compared to placebo. It was shown that a greater improvement of the NSA-16 total score had occurred for those patients who took pimavanserin compared to placebo. This was statistically significant with a p-value of p=0.043. You can see right away that statistical significance was barely achieved. It almost missed, but the point is yet again that the primary endpoint was met.
Now, heading back to what I described above about only using the higher dose. I personally think had the whole study been done with the 34 mg dose, it is likely that the final outcome would have been much better. For instance, just basing the statistical significance of those who only took the highest dose 34 mg of pimavanserin and comparing it to placebo, the unadjusted p-value was p=0.0065. To be fair, I definitely still see a path forward. The downside is that it will require a second pivotal study. It is said that Acadia will launch a second pivotal study using 34 mg of pimavanserin to treat negative symptoms of schizophrenia in the 1st half of 2020. The main point here to infer is that clinical trials sometimes require adjustments in trial design because they may not be adequate enough.
I believe the second pivotal study incorporating only the higher 34 mg dose should see a large improvement in efficacy. To be fair though, I believe that the biotech still did well even if it just barely made the primary endpoint. Especially, when you consider that there are no currently approved FDA drugs for negative symptoms of schizophrenia. In essence, this was an uphill battle to begin with. With no FDA approved therapies, these patients are left in the dark in terms of looking for a good treatment. That’s why it is encouraging that Acadia is at least pushing forward with the higher dose, which I think it can succeed with based on this recently reported study.
Another Indication Has Already Seen A Study Stop Early On Positive Data
Acadia Pharmaceuticals will be able to move on for the treatment of negative symptoms of schizophrenia. Having said that, there is an even more positive study to look into. This involves a phase 3 study using pimavanserin to treat patients with dementia related psychosis. Not only has the company seen a stoppage of the study early based on positive efficacy at the interim analysis, but it is going to be presenting final data at an upcoming medical conference.
It is going to present detailed results at the 12th Annual Clinical Trials On Alzheimer’s Disease (CTAD) meeting on December 4, 2019. I don’t believe there will be a major surprise in data, because the study had already met the primary endpoint. But Acadia will be hosting a live webcast following the event after presenting its late-breaking oral presentation on it. The phase 3 HARMONY study was stopped early, because the primary endpoint of time to relapse of dementia-related psychosis achieved superiority for those who took pimavanserin over those who took placebo. This was observed at a planned interim efficacy analysis. I believe this upcoming event in a few days could possibly be a major catalyst. That’s because the only data revealed so far is that the study was stopped early because of criteria stating that there had to be a one-sided p-value of p<0.0033. That means the late-breaking oral presentation should give a more detailed look at the data, which will be highly bullish for the stock. If that catalyst isn't enough, the company expects to meet with the FDA about possibly being able to submit a supplemental NDA in 2020. If all goes well with that meeting, then soon after a sNDA filing will be another positive catalyst for the stock.
According to the 10-Q SEC filing, Acadia Pharmaceuticals had cash, cash equivalents, and investment securities of $683.8 million as of September 30, 2019. A huge sum of cash came from a public offering, where it raised a total of $271.5 million along with additional funds stemming from an employee option exercise of $55.1 million. This is more like a pharmaceutical company now, in that its drug Nuplazid has already been approved by the FDA.
Nuplazid has been approved to treat hallucinations and delusions associated with Parkinson’s disease psychosis. That means it is generating revenue at the moment. In the most recent third-quarter of 2019, net sales grew to $94.6 million. This may seem like a low amount of sales, but if you compare it to the same time period in the prior year, it was a massive gain. Net sales increased by 62% year over year. Not only that, but Acadia is guiding higher full-year 2019 sales of Nuplazid. It raised its sales guidance for this year to $330 million-$340 million.
The primary endpoint was still met in the late-stage ADVANCE study using pimavanserin to treat negative symptoms of schizophrenia. While some refer to the study narrowly meeting the primary endpoint as being mixed, I view it as a major positive. One major reason I listed above is that those given the 34 mg dose of pimavanserin did achieve statistical significance in a superior way. Yes, the risk is that a second study will be needed. However, efficacy of the higher dose of the drug was proven in treating this patient population. It will now just be a waiting game for this particular indication.
The more important piece of news involves another short-term catalyst, which is the presentation coming up on December 4, 2019 in a few days. Results from the phase 3 HARMONY study will be presented. Even though this study was stopped early due to a prespecified interim analysis, it will be important to get a look at detailed information. Ultimately, this dementia related psychosis indication could end up being another FDA approved indication for the company. That will definitely be a nice boost in sales for Acadia’s drug if and when that happens. The biotech plans to meet with the FDA in 2020 to discuss a possible filing of a supplemental NDA for potential marketing approval of Nuplazid for this indication.
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