Liquid Biopsy · @Liquid_Biopsy
21st Nov 2014 from TwitLonger
1st page $ACAD Cowen Initiation: Elusive Late-Stage Blockbuster
Neuro Asset In Its Native Habitat We are initiating on ACAD with an Outperform rating and $46 target. We think
Nuplazid has extraordinarily high chances of U.S. approval for Parkinson's Disease
Psychosis. Our KOL survey strongly suggests broad PDP adoption and we estimate
$2B WW peak sales. We also think Nuplazid has potential in other psychoses.
We think Nuplazid will be approved in 2015/2016 WW and become standard
of care first line treatment for Parkinson's Disease Psychosis.
Nuplazid is ACAD's NDA-ready 5HT2a inverse agonist for Parkinson's Psychosis
(PDP). The drug has very positive, significant, clinically meaningful Ph3 data and FDA
breakthrough status. Ph3 data also showed strong safety/tolerability. FDA encouraged
ACAD to file on the basis of its '020 trial based on unmet need and strength of data.
We expect a filing in 1Q15, with approval/launch by the end of the year. Based on
our recent survey of high prescribing neurologists, we think clinicians' receptivity
to the drug will be extraordinary. We think there is dissatisfaction with current offlabel
dopaminergic anti-psychotic drugs that have limited efficacy or unacceptable
safety. Survey respondents suggested 35% of PDP patients do not get treatment now
because of fear of side effects and 50% of those currently treated might be switched
to Nuplazid after approval.
Survey says: broad adoption based on great safety - we believe the drug will
have strong pricing, good reimbursement and reach peak sales of $2B WW.
We expect Nuplazid to become the only approved PDP therapy. Given this and the
strong safety/efficacy data generated, we think the drug will be able to secure a
~20% premium price to current branded anti-psychotics. Given our survey data and
Ph3 data that suggest reduced caregiver stress, we think adoption will be broad,
and use in the outpatient setting may prevent/delay need for LTC to a degree that
pharmacoeconomic analyses support wide reimbursement. Our survey suggests to us
the drug could reach ~40% peak share of moderate to severe PDP patients, including
new patients and switches. This could represent around $2B in WW peak sales for
PDP alone.
We also think Nuplazid has strong potential in schizophrenia; market potential
in Alzheimer's Psychosis, if clinically successful, could be huge.
Nuplazid may also have potential in schizophrenia given the association between
5HT2a agonism and psychosis. Early proof of concept data suggests it has potential in
schizophrenia maintenance with a superior safety/tolerability profile to current drugs.
We think Nuplazid could reach $1.2B peak sales for schizophrenia in the US alone.
ACAD is also studying the drug in a proof of concept Ph2 for Alzheimer's Psychosis,
another major unmet need. High prescribing neurologists in our survey believe the
drug has significant potential in this indication (and would widely use in the near-term
if possible) although academic KOLs are more skeptical. While we give this indication
a large $5B+ peak sales potential, we give it only a 20% chance of success.