On Wednesday, RBC Capital adjusted its price target for Acadia Pharmaceuticals (NASDAQ:ACAD) shares, reducing it to $26.00 from the previous $29.00, but kept its Outperform rating on the stock.
The adjustment follows the observed challenges in the launch of Acadia's new drug, Daybue, which has not met the initial expectations for new patient starts.
According to the firm, the shortfall in new patient starts is seen as a representation of the initial difficulties encountered during the product's launch phase.
Despite these challenges, the firm notes that there are currently 900 patients actively using Daybue, out of an estimated 5,000 diagnosed patients, indicating a growing user base as the drug reaches 15 months on the market.
RBC Capital highlights the importance of increasing physician and caregiver awareness and education on drug titration, which is essential for improving tolerability, sentiment, and uptake of Daybue, especially in key high-volume segments. This factor is now considered crucial for the stock's performance.
The firm also points out that the strength of Nuplazid, another of Acadia's products, continues to provide a reliable source of cash flow, which helps to protect the stock from downside risk.
Looking ahead, new developments in Acadia's pipeline, including ACP-101 for Prader-Willi Syndrome (PWS) and ACP-204 for Alzheimer's Disease Psychosis (ADP), are progressing but are not expected to provide proof points until beyond 2024.
In updating its model for Acadia Pharmaceuticals, RBC Capital has taken a more conservative stance on Daybue's launch expectations. Despite the reduced price target, the firm maintains its long-term positive outlook on the company, affirming the Outperform rating while acknowledging the need for caution in the near term.
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