Friday, August 29, 2014

Acadia Pharmaceuticals: ($23.98)

Another strong week for Acadia +8.21%, that was fueled by Roche's buyout of InterMune announced on Sunday.  That acquisition lit a fire under small cap biotechnology this week.  Below is a weekly chart of ACAD.
The chart above is displaying an asymmetrical triangle or close to it.  A break out of that triangle would be bullish from a technical aspect, because it would close near a new eight week high.  The weekly chart is not overbought from a relative strength (RSI) perspective either, giving it more upside potential. Thank you for reading, and have a great Labor Day weekend.

Contact Information:  portfoliomgt1@gmail.com

Wednesday, August 27, 2014

Acadia Pharmaceutical: ($23.58)

A consolidation day for the markets and ACAD.  These days are good for the intermediate term picture, and for the trend to continue higher.  A few charts below.
Above is the NYSE Summation index with it's moving average.  This has been a good trend indicator for market direction and identifying oversold and overbought areas. The Summation Index uses an exponential moving average to measure advancing and declining issues on any given day.  Notice that the index is trending higher and above it's moving average.
ACAD above was overbought heading into today, so I expected some consolidation, and that is what we got.  All good for the uptrend to continue.
Acadia has a tight correlation with the XBI Biotech index above.  So as the index trends, so goes ACAD in the general direction.  At least it has been that way for the past two months.  

Bottom Line:  I expect more consolidation in the overall market, ACAD, and the XBI index in the coming days.  Consolidation is healthy after new market highs have been achieved.  August has been a strong month for equities, although it has been hard to judge this move higher based on the very low summer volume that we have been getting.  September is just around the corner.  Thank you for reading.

Monday, August 25, 2014

Acadia Pharmaceuticals: ($23.15)

Biotechnology stocks were strong today on the back of Roche's $8.3 billion buyout of InterMune announced Sunday evening.  InterMune has their drug pirfenidone for a deadly disease called pulmonary fibrosis.
From the chart above ACAD is up 14% in the month of August alone.  Biotech and the S&P 500 are also experiencing a strong month as well. Thank you for reading.  

We are long term investors of ACAD.

Wednesday, August 20, 2014

Acadia Pharmaceuticals: ($22.69)

The market reached a new all time high today as the Federal Reserve starts their annual Jackson Hole meeting to begin this weekend.
The market is sitting at all time highs, but very overbought in the short term. 
The XBI index and Acadia have a very close correlation as seen in the chart above.  Both have out performed the overall market over the last ten trading days.
The daily chart of ACAD, has the stock trading above the pivot neutral area, and below the $23.59 next higher resistance area.  The stock has had a strong August thus far, consolidation has taken place in the $22.00 - $23.00 range this week which is healthy for the next move higher.

Bottom Line:  Stocks have reached a new all time high just prior to the Federal Reserve Jackson Hole meeting this weekend.  Stocks are overbought in the short term, so I expct some consolidation at minimum at these levels. Acadia has performed strong in the month of August and has been consolidating in the $22.00 - $23.00 range this week. Thank you for reading.

We hold shares of ACAD

Saturday, August 16, 2014

Acadia Pharmaceuticals - Sleep Disturbance Study

During the second quarter conference call ACAD had mentioned that they are planning a "sleep disturbance" clinical trial for Parkinson's disease patients either in the 4th quarter of 2014 or first quarter 2015. This post will examine the potential market size for Parkinson's Disease patients who have sleep disturbances.
Sleep disturbances which include sleep fragmentation, day-time somnolence, sleep-disorder breathing, restless leg syndrome, nightmares and rapid eye-movement sleep behavior disorder, are estimated to occur in 64% of patients with PD according to this study, PD and Sleep Disorders...
So independent of patients with Parkinson's Disease Psychosis (PDP) and obviously there will be some overlap of the 30-40% who experience psychotic behavior, and up to 64% that experience "sleep disorders", out of the estimated one million in the U.S. with Parkinson's Disease could benefit from Pimavanserin. 
During the phase 3 trial that Acadia ran from 2010-2012 for Parkinson's Disease Psychosis patients, the company pulled some data that included sleep patterns among the treatment group that was given Pimavanserin.















Charted above is the sleep data using the SCOPA - sleep scale. Both nighttime sleep and daytime wakefulness was improved in the Pimavanserin treated group (blue line) compared to the control group (placebo) trial participants.  Data from another study the company completed in 2006 with 45 healthy subjects to evaluate slow wave sleep (SWS) in a double blinded placebo study, found that the treatment group had positive results at the 5 mg and 20 mg level sustainable from day one and day 13 evaluation periods. These observations have led the company to pursue a sleep disturbance trial for this fragile group of patients.  Potentially if the trial proves to be effective similar to the previously run phase 3 trial, then the market for Pimavanserin could potentially grow approximately 24% to 34% to a total of 64% in the U.S. What is likely to occur if a trial is successful, is that the FDA could expand their label to include sleep disturbances in addition to PDP.   

Patients with Alzheimer's disease (AD) have similar sleep disturbances. According to this study Pharmacotherapies for sleep disturbances in Alzheimer's disease,  the authors found no significance in the drugs melatonin, trazodon, or ramelteon for patients with Alzheimer's disease that experience sleep disturbances. So, currently there does not seem to be a safe, and effective drug for this fragile group of patients either. An unmet market that Pimavanserin could potentially serve, in addition to Parkinson's patients with sleep disturbances.  There are approximately four times the number of AD patients compared to PD patients in the U.S.  The company is currently in a clinical phase 2 trial to test Pimavanserin for patients with Alzheimer's disease that have experienced psychosis (ADP).  Those results are not expected until mid to late 2015.  Within those results, and similar to the phase 3 study for PDP, should yield more data on sleep patterns for the treatment group in that trial. 

The company is doing a nice job of expanding their lead drug Pimavanserin beyond Parkinson's Disease Psychosis (PDP), but also within that population, sleep disturbance studies, and potentially Schizophrenia studies as a mono therapy or coupled with already available drugs. Thank you for reading.

Friday, August 15, 2014

Acadia Pharmaceuticals: ($22.59)

Another volatile options expiration day for the markets.  Geo-political risks in Ukraine pulled a higher market lower late morning, then a rebound occurred in the afternoon.  The market finished flat on the day. Below are some familiar charts.
The S&P 500 daily chart above is trending upward and is above the neutral pivot area.  The long tail today, is a sign that buyers are supporting this market by buying the dips.

Here is a month to date chart of ACAD, the XBI biotechnology index and the S&P 500 index.  Acadia has had a strong August performance against the indexes +11.45%, but pulled back some today, which I view as healthy.
Above is a 60 minute chart of ACAD.  Notice that it was in overbought territory heading into today's session, so any kind of pullback, to work off those over bought readings, is positive for continued upward direction. The stock finished the week higher by +6.71%.

Bottom Line:  Strong August for ACAD, +11.45% and out performing the XBI biotechnology index over this period.  Biotechnology continues to be a strong sector during the month of August. The overall market was very volatile due to options expiration week, and some geo-political happenings in Ukraine.  Thank you for reading.

Wednesday, August 13, 2014

Acadia Pharmaceuticals: ($22.37)

Good day for the markets, and ACAD was an out performer as merger and acquisition activity potential was prevalent within the biotechnology sector today.  Seems, that the worse the economic news gets, the better the market seems to perform, as today retail sales were well below expectations, and last night Japan GDP contracted -6.8% in the second quarter, somewhat expected mainly due to state tax increases in April. Familiar charts below tell the story well.

The S&P 500 had a strong day today and has re-traced back to the neutral pivot area at the close of the day.  Volume was anemic though. Looks like a new upward trend may be developing, but we still need to see more trading sessions to judge this pullback.
We have the XBI index above along with ACAD and the S&P.  ACAD has been a strong performer today breaking away from the indexes. The XBI index has also been strong lately.
Acadia closed above the pivot today and volume was just above average. I rate the chart above average and the stock can still climb further until over bought readings come into play.  Acadia benefited from biotechnology merger and acquisition speculation within the sector.

Bottom Line:  Tough market to call at this point.  We either hit the bottom of a -4% pullback last week, or we are just getting a bounce from that pullback and the downtrend will continue.  Biotechnology has been a hot sector as merger and acquisition activity has been heating up. ACAD has been a good performer over the last week against the indexes as the company has been seen as a good potential acquisition candidate for a large pharmaceutical company.  We have been long shares of ACAD. Thank you for reading.

Monday, August 11, 2014

Acadia Pharmaceuticals: ($21.41)

Markets still have that upward bias today, although gave up most of the gains from the morning.  The S&P 500 is trading just under the pivot, or what I refer to as neutral.
Market opened higher then gave away the gains in the afternoon session to finish up, and just under the pivot on the chart above.  
The biotechnology index (purple) had a strong day today out performing the S&P 500 index and ACAD.

Acadia finished just above the pivot or what I refer to as the neutral area. The stock could not hold the gains from this morning and trailed the daily return of the XBI Biotechnology Index also.  

Bottom Line:  Today's market action really does not give us any indication on near term direction of the markets.  We are still higher then the lows put in last week, but the volume of today's action does not suggest heavy interest in bidding up stocks.  Of course we are still in the dog days of summer months. Thank you for reading.

Friday, August 8, 2014

Acadia Pharmaceuticals: ($21.17)

The market has bottomed in the near term, as of yesterday.  The pullback, should it hold, would be -4.07% from the all time high of $199.06.  A few charts including ACAD below.
I have written, that I expected a 50% fibonacci retracement down from the all-time high, as a reasonable pullback that coincided with the pullbacks we have seen the last year.  We came close enough to that level yesterday to complete the pullback.
Above is the same three day chart we have been showing, which includes ACAD, the Biotechnology Index XBI, and the S&P in red dashed.  Both ACAD, and the XBI Index, have out performed the overall market (S&P) over the last three day period.  Biotechnology in the small cap area has held up well.
ACAD sits just underneath the pivot area on the daily chart of $21.40.  A close above that pivot would be positive for the stock on a technical basis.  

Bottom Line:  The market has showed solid signs of bottoming the last few days, and the XBI index and ACAD have performed well in the near term.  I expect further gains ahead for the market in the coming days, and ACAD to at least consolidate in this general area, if not close above the $21.40 pivot point just above.  Thank you for reading.

Wednesday, August 6, 2014

Acadia Pharmaceuticals: ($21.34)

Acadia had a decent day on the back of their 2nd quarter conference call yesterday.  The good news again, was that the company is planning on filing an application in the EU six to nine months after submitting the new drug application to the FDA.  They are by-passing another Parkinson's Disease Psychosis phase three trial, which could take up to three years to complete not to mention the cash burn.
The market is searching for a bottom the last few days, and has made strides in the short term by consolidating at the present level.  Below are the usual charts.
The chart above suggests that if we are going to re-trace to the 50% fibonacci level, then there is still a bit lower that we need to go.  The market has been oversold the most so far in 2014.  
Since we seek biotechnology investments, what better chart to show than that above.  The XBI biotech index along with the S&P and ACAD. The three day performance above suggests that biotech has outperformed during this time and ACAD has outperformed the index, with the S&P essentially flat.
ACAD above is sitting just under a resistance point of $21.47.  It would be a positive if the stock can close above this level in the near term, technically.  The last attempt at this level failed and pulled back.  I rate the chart neutral to positive in the near term, as the stock has been outperforming the index and the S&P the last three days.

Bottom Line:  The overall market is trying to find a bottom, and has been consolidating in the short term at this level.  Biotech and ACAD in general have been out performers in the short term compared to the market.  ACAD had some positive news to share yesterday regarding EU strategy going forward.  I think ACAD can rally from here some if the overall market holds up ok.  Thank you for reading.

Tuesday, August 5, 2014

Acadia Pharmaceutical: ($20.77)

The Acadia second quarter conference call went extremely well.  The company still targets the end of the year to file the NDA for PDP. What's even more important is they plan to file an application in the EU for Parkinson's Disease Psychosis six to nine months after filing the NDA with the FDA here in the U.S.  The EU filing has been an overhang on the stock for some time now.  If the company had to run another Phase 3 trial in the EU for PDP, it could take up to another three years and a huge cash drain for that trial.

Future Trials:
Sleep disturbance trial (2014-2015) for Parkinson's patients.  Trial is currently being designed.
Schizophrenia (2015) as Mono-therapy for maintenance stage and symptom control.  Patients cannot tolerate staying on the current approved drugs for an extended period of time.

Safety Stats:
250 patients have been on Pima for one year or longer, 100 patients at least two years or longer, with the longest single patient exposure exceeding eight years.

Bottom Line:  The new information learned today from the company, was related to the potential filing of a marketing authorization application (MAA)  in the EU 6-9 months after filing the new drug application with the FDA.  In other words, they are using the NDA as a fore runner for filing the MAA in the EU. The company is in a very strategic position with patent expiration until 2028, and the company holds worldwide rights to Pimavanserin.  Thank you for reading.

Friday, August 1, 2014

Acadia Pharmaceuticals: ($20.62)

I recently wrote about the potential for at least a pullback of the markets of -4% to -6%, if not a correction of -10% to -15% from the all time high that occurred last week of $199.06.  The sell-off started yesterday, and today we we continued downward.  Some charts below with my comments.
Above, is a daily chart of the S&P 500.  I am expecting the same type of pullback that we received in February, which resulted in a pullback to the 50% retrace line on the Fibonacci chart.  This would result in a -5% sell off, which has been the norm over the last year. 
Above is the XBI index, the S&P 500 and ACAD in black over a three day period. ACAD has been a nice out performer finishing basically flat over the last three days while the XBI and SPY finished much lower. 
The above chart of ACAD, has the stock sitting just under the pivot point, or neutral area.  The volume has been below average as the market has sold off this week.  This is what you want to see, as any weakness in ACAD can be attributed to the overall market falling.

Bottom Line:  Whether we get a pullback in the -4 to -6% range or something closer to a correction of -10% to -15% remains to be seen, and is inconclusive at this point in time.  We should have a better grasp of how severe of a sell off we get over the next few trading sessions.  ACAD has been a nice performer relative to the XBI index and the S&P 500 over the last few days.  The company will be announcing second quarter results next Tuesday afternoon.  Thank you for reading.

Wednesday, July 30, 2014

Acadia Phamaceuticals: ($21.21)

Another volatile day for the markets.  Second quarter GDP was reported by the government at 4.0% which is an improvement from a decrease of -2.1% in the first quarter. Most people think the government is generally honest in the data that they report.  Then at 2 p.m., the FOMC statement was perceived as more hawkish than usual, creating another whiplash.  The reason I use charts so frequently is they reflect the price movements in black and white void of the noise.
The sixty minute chart above has several gaps in the month of July.  Stocks broke out of the range (false move) last week, and now are sitting just above the ascending support.  
Acadia has been highly correlated with the XBI biotechnology index in purple above.  The last two day's the index and ACAD have been out performers of the S&P (red dashed line), which is positive for biotech's and ACAD also.
The daily chart of ACAD above has the stock sitting just under the pivot point. The company will release 2nd quarter earnings on Tuesday August 5th.  I am not expecting anything new at this point to be announced from the company.

Bottom Line:  A volatile day today as the data releases are now having an impact moving the markets around.  The GDP print of 4% was a strong rebound from the first quarter, but within the data, inflationary pressures have also increased.  ACAD has been a stable stock the past week, more or less correlating to the XBI index, which has been a strong performer lately.  Thank you for reading.

Monday, July 28, 2014

Acadia Pharmaceuticals: ($20.26)

Another volatile day for the market.  Stocks opened, and immediately headed lower, then around noon, preceded higher and closed essentially flat on the day.  Economic reports were mixed. Some charts, a sixty minute chart of the S&P below.
Neutral, to up trending looking chart, in the short term.  Volume below average, with plenty of gaps during the month of July.  Still an indecisive, choppy market.
Three day chart of the XBI Biotechnology Index, with ACAD.  The stock has done well over the past three trading sessions against the index it has been highly correlated with.  
ACAD daily chart has the stock trading just above a support area.  The stock has been steady between the $20.00 and $21.00 mark for the past week.  The company will be holding their second quarter earnings conference call next week.

Bottom Line:  The market is still trading volatile, with many trading gaps daily in the month of July. Biotechnology in the small capitalization area has not participated in the recent overall market highs, as there is an underlying risk-off scenario unfolding within that sector, which potentially could create volatility for ACAD. Thank you for reading.

Friday, July 25, 2014

Acadia Pharmaceuticals: ($20.62)

The markets are lower today due to earnings releases from Visa (V), and Amazon (AMZN) last evening. AMZN in particular, did not have a great looking report. Geopolitical factors are also keeping the market lower before the weekend.
The S&P  broke out of the trading range this week to set a new high, but quickly gave back those gains, to once again fall into the previous trading range above. Technically, this is known as a false breakout move.
Above is a weekly look at the index that Acadia is highly correlated with, the biotechnology index (XBI). On the week, the XBI and ACAD had a good week. Biotechnology had a strong week as a whole compared to other market sectors.
ACAD is trading just above a support area of  $20.20.  The volume has been below average, which can be expected for a mid-summer day, for a stock with no catalyst in the short term. I rate the chart as neutral.

Bottom Line:  The S&P 500 did break out of a three week trading range, but fell back into the range today, as earnings reports and conflict outside of the US before the weekend has traders taking some risk off the table.  Acadia has been trading with below average volume, but has been a steady stock in the $20.00 to $21.00 range, on a week that the biotechnology sector was a strong performer.  Thank you for reading.