For Acadia Pharmaceuticals Chief Executive Catherine Owen Adams, discovering a treatment for Alzheimer's disease psychosis isn't just a professional goal. It's also personal.
Adams took the reins at the midsize biotech company last September. Since then, it's apparent that "new management has built an interesting early-stage pipeline basically behind the scenes to accompany the two visible late-stage assets," Leerink Partners analyst Marc Goodman said in a report.
Acadia's late-stage pipeline includes ACP-204, a potential treatment for psychosis due to Alzheimer's disease or Lewy body dementia. Both are progressive forms of dementia that can impact cognition, movement, behavior and mood. Comedian Robin Williams was famously diagnosed with Lewy body dementia before his death in 2014.
There's another reason why the quest for a treatment is important to Adams: both her parents suffer from psychosis due to Alzheimer's disease. Before taking the job at Acadia, Adams said she considered what would be especially meaningful for her.
"And I really felt like I would be really motivated by bringing drugs to market in the space that I know will make a difference to families," she told Investor's Business Daily. "And it's a hard space. But I've never shied away from hard in my life."
Acadia Pharmaceuticals' Nuplazid, Daybue
San Diego-based Acadia Pharmaceuticals got its start in 1993. Shares went public in 2004 via an initial public offering.
The company is best known for its drug, Nuplazid, which treats psychosis due to Parkinson's disease. Nuplazid generated $609 million in sales last year, growing almost 11%. This year, sales are expected to rise another 11% to $675 million, according to FactSet.
But a key patent protecting Nuplazid from generic competition will expire in 2030. Analysts forecast a first-ever sales decline in 2030. From a peak of $815 million in 2029, Nuplazid sales are projected to fall 13% to $710 million in 2030.
Sales of Acadia Pharmaceuticals' other commercial product, Daybue, are also expected to dip in 2030 by more than 5% to $638 million after peaking at $675 million in 2029. Daybue treats Rett syndrome, a rare and progressive neurological disease that mostly affects girls.
Notably, analysts expect overall revenue to fall a smaller 3% in 2030. That's because Acadia's pipeline assets will start kicking in over the next few years.
For the first time, Acadia Pharmaceuticals put a number on its early-stage pipeline. The company sees a potential $12 billion peak from these drugs, which include treatments for major depressive disorder, essential tremor and chorea — involuntary movements — tied to tardive dyskinesia and Huntington's disease.
No Approved Treatments
Acadia is currently running a midstage study of ACP-204 in patients with psychosis due to Alzheimer's disease. The company expects to have those results in mid-2026. Acadia also plans to start the Phase 2 study in Lewy body dementia patients in this quarter.
ACP-204 is a next-generation version of Nuplazid. Needham analyst Ami Fadia says the drug could top $2 billion in sales "based on the prevalence and high unmet need." There are an estimated 7 million Alzheimer's patients and 1 million Lewy body dementia patients who could benefit.
There's no approved treatment for these patients. Instead, they often receive off-label antipsychotics.
Investors have also zeroed in on Acadia Pharmaceuticals' ACP-101, a potential treatment for Prader-Willi syndrome, or PWS. PWS is a rare genetic disorder that causes physical, mental and behavioral problems. It generally leads to an insatiable appetite, developmental delays and cognitive impairment.
Acadia is expected to unveil Phase 3 results for ACP-101 in the fourth quarter.
"Positive data starting with ACP-101 could start momentum in the stock," Needham's Fadia said in a note.
But the Prader-Willi syndrome drug has faced some struggles. In earlier testing, before Acadia acquired it, a low-dose of ACP-101 showed a statistically significant improvement in PWS symptoms. But the higher dose missed its mark. Adams, the CEO, says she believes the drug caused an off-target effect on a key receptor. Doing so counteracted somewhat the behavioral impact of the drug.
She feels more confident about the lower dose and the new study.
RBC Capital Markets analyst Brian Abrahams says ACP-101 remains "high risk, but could have meaningful market (opportunity) upon success."
Soleno Therapeutics won approval for its Prader-Willi syndrome treatment, Vykat XR, in March. Harmony Biosciences is also working on a midstage treatment for the same disorder.
Tough Treatment Areas
In the fourth quarter, Acadia Pharmaceuticals will start a midstage test in major depressive disorder. The company also expects to begin a Phase 2 study of the essential tremor drug in mid-2026.
The company is also in preclinical testing for a drug that could treat chorea tied to tardive dyskinesia or Huntington's disease. The treatment would rival Neurocrine Biosciences' Ingrezza, already a massive blockbuster on the path to top $3 billion in 2030 sales.
Leerink's Goodman notes all three are "very early stage." Depression is tough given the placebo effect often associated with those studies. But Adams, Acadia's CEO, says the company's drug, ACP-211, could have a similar effect as ketamine with a lower risk of sedation and dissociation.
If successful, it would rival Johnson & Johnson's Spravato, a nasal spray that acts similar to ketamine.
Essential tremor is another tough space. Adams acknowledges there's a "graveyard" of failed treatments for essential tremor. Neurocrine, Jazz Pharmaceuticals, Praxis Precision Medicines and Sage Therapeutics have all had clinical setbacks for their essential tremor drugs.
'Show Me The Data'
Investors will likely maintain a "show me the data" attitude when it comes to these new assets, Leerink analyst Goodman said. But the Street is already counting on, at least, ACP-204 and ACP-101 making their commercial debuts in 2026.
Acadia Pharmaceuticals, meanwhile, has guided to a peak of $1.5 billion to $2 billion for its two current products, Nuplazid and Daybue.
"If Acadia can achieve this goal, then this stock is attractive from a valuation perspective even if the pipeline doesn't progress," Leerink's Goodman said. "However, the real upside is that Acadia hits on an asset or two to make the name a sustainable growth story and thus drive multiple expansion."
Goodman is willing to take that bet, and reiterated his outperform rating.
Acadia stock broke out of a cup base with a buy point at 20.68 on May 16, rocketing about 26.5% after winning a patent dispute around Nuplazid. Since then, shares have lingered above or in a buy zone, which runs up to 21.71 according to MarketSurge.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
