ACAD Pharmaceuticals

We sold ACAD yesterday in the $14.20 range after the stock has doubled within the last few months.  We used the strength of the stock from being inducted into the Nasdaq Biotech Index as of Monday the 20th.  The nearest catalyst looks to be the starting of the Alzheimer's (ADP) phase II trial which the company guided for  the second half of 2013.  Since we are still bullish on the long term prospects of ACAD we will look to re-enter the stock at lower prices after working off severely over bought technical readings, not only on the stock itself, but on the overall market in general is also overbought.

Above is a daily chart of ACAD.  We may be interested in owning the stock again if it drops to around the $13.00 level or lower, approximately -10% lower than our sell price on Tuesday.  

Bottom Line:  Although we like the long term prospects of ACAD, we think the stock will retrace some of the move higher it has achieved over the last two months.  The retrace will be healthy and set the stage for new highs in the coming months ahead.  Thank you for reading.

ACAD Secondary Offering

ACAD is pricing 8 million shares at $12.50 for a total of $100 million.  The offering would bring their cash total to approximately $178 million at 2013 year's end company forecast.  I like the move, as it can help in potential negotiations for partnership or outright purchase by a larger entity.  The stock in pre-market is actually trading higher than the offering price which is extremely positive for now.  The cash will also aid in running the Alzheimer's (ADP) trial phase II, and a European Parkinson's trial if they wish to.  After the offering the share count will total around $88 million shares outstanding.  We hold shares of ACAD.  Thank you for reading.

ACAD: First Quarter Conference Call ($12.03)

Since ACAD is a emerging biotech, there is not much to read into the financial part of the news release, other than what their cash on hand and expected year end cash will be.
-ACAD currently has $101.5 million in cash and expects to end 2013 with around $78 million.
-With their impressive phase III results for Pimavanserin for Parkinsons disease psychosis (PDP), they are planning an expedited path to an NDA (new drug application) filing expected mid 2014.
-Plan on initiating a phase II study with their lead drug Pima for Alzheimer's disease end of 2013.
-During the conference call today the CEO also stated that the FDA has not approved any drug for the treatment for PDP, and that there is no current drug to effectively treat Alzheimer's (ADP) either.

The stock on a weekly basis above, is still overbought despite the pullback from the high upper 13.00 level.  Overall, the stock has held up quite well since doubling in price over the last few months.  

Bottom Line:  ACAD is in a very good position with plenty of cash for now, a long patent life to 2028, and a single, safe and effective drug for PDP and potentially Alzheimer's.  Thank you for reading.