Shares of ACADIA Pharmaceuticals ACAD plunged 22.2% after the company announced that its planned new drug application (NDA) on pipeline candidate Nuplazid has been delayed and that its Chief Executive Officer (CEO) has retired and resigned from the company’s board.
Following an assessment of its manufacturing quality systems and procedures, ACADIA Pharmaceuticals now plans to submit its NDA on Nuplazid in the second half of 2015, delayed from the previous plan of submission in the first quarter of 2015. We remind investors that this is the second delay in NDA submission by the company.
In Nov 2014, the company had said that it will submit its NDA in the first quarter of 2015 as compared to the previous plan of submission by 2014-end.
The candidate is being evaluated for the treatment of Parkinson’s disease psychosis in the second half of 2015.
The company attributed the delay to the additional time required to complete the preparation of systems to support commercial-scale manufacturing and supply in order to facilitate the FDA’s review.
ACADIA Pharmaceuticals reinstated that the postponement is not due to a change in the candidate’s clinical or safety profile or the result of any interaction with or request for information from the FDA. We note that the candidate enjoys Breakthrough Therapy designation in the U.S.
Concurrently, ACADIA Pharmaceuticals announced the resignation of CEO Uli Hacksell from the board of directors.
Our Take
ACADIA Pharmaceuticals (ACAD) currently carries a Zacks Rank #4 (Sell). A consecutive delay in NDA submission for Nuplazid along with the stepping down of the CEO has clouded growth prospects of the candidate.
We note that Nuplazid is the lead candidate at ACADIA Pharmaceuticals. Hence, the delay in NDA submission is a major setback for the company as well. Earlier in the week, there have been takeover rumors for ACADIA Pharmaceuticals leading to a surge in shares of the company.
We expect investor focus on further updates from the company on the NDA submission.
Some better-ranked stocks in the health care sector include Mallinckrodt public limited company MNK, Actavis plc ACT, and Impax Laboratories Inc. IPXL. All these stocks hold a Zacks Rank #2 (Buy).
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