ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) impressive performance in the second half of the year, has caught the attention of institutional investors. Sentiment on Wall Street shows that the stock could rise to the $50 a share mark after the Food and Drug Administration granted the company’s dementia drug, pimavanserin, breakthrough designation.
The candidate drug is being investigated for the treatment of hallucinations as well as delusions associated with dementia-related psychosis. Renewed investor interest follows confirmation from Acadia that there is no FDA approved treatment for the condition.
Institutional Holding
Regulatory filings indicate that institutional investors have been ramping up stakes in the biopharmaceutical company given the market opportunity for the treatment of the medical condition.
Baker Bros has emerged as the largest investors in Acadia with a 22.1% stake after increasing its stake to 27.34 million shares from 25.82 million shares, as of the end of the second quarter. The hedge fund stakes represent a 4.61% of its total equity portfolio.
FMR LLC is the second largest investor in Acadia Pharmaceuticals with a holding of 18.31 million shares, valued at $510.8 million. Vanguard comes distant third with a holding of 7.60 million shares valued at $212.09 million. Regulatory filings also indicate that Life Sciences exercised a warrant for the acquisition of 1.4 million shares of Acadia Pharmaceutical common stock at an exercise price of $1.38 a share.
Market Opportunity
The FDA breakthrough designation for pimavanserin is a milestone achievement for Acadia given that it will now be able to target a much larger group of patients in clinical trials. The designation is also expected to expedite the drugs development as well as review by the FDA.
The trials should open up, greater revenue opportunities given that dementia affects nearly 8 million people in the US with 2.4 million of the people struggling with psychosis. One Positive Phase III trial supplemented by data from other studies should be more than enough for ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) in pushing for a New Drug Application with the FDA.
