Nuplazid Priced at $23,400 / Year

Based on the Acadia Pharmaceuticals first quarter conference call, pricing for the recently approved Nuplazid for Parkinson's Disease Psychosis (PDP), will be around $23,400 per year, wholesale acquisition cost (WAC), much higher than we anticipated.  We previously relied on company information of around $13,000 per year for Nuplazid. The adjustment higher makes a large valuation difference, and puts the recent price of ($27.50) rather cheap based on a potential buyout scenario. 

1,000,000 With Parkinson's in US.
30% develop PDP or Parkinson's Disease Psychosis at some point.
300,000 total patients with PDP.
50% penetration rate of those with the psychosis.
150,000 the actual number treated for PDP with Nuplazid out of 1 million Parkinson's total victims.
$65.00 = WAC price per tablet per day of treatment.  Equates to around $23,400 per year. 
$32.50 = Sales to Acadia per 34 mg tablet after discounts various distributors.
$11,700 = Per patient ACAD annual revenue, ($32.50 per day * 30 days * 12 months)

$1.755 billion = Total peak revenue to ACAD, (150,000 patients * $11,700 annual revenue to ACAD) U.S. Parkinson's Disease Psychosis only.  If applying a buyout scenario of four times peak revenue = $1.755 x 4 = $7.020b valuation / 130k (shares outstanding) = $ 54.00 share price.  It would take 85,470 (PDP) patients treated with Nuplazid to achieve $1 billion in revenue.  Acadia did pre-marketing, and estimated around 11,000 Parkinson's Disease doctors in the U.S.  Each doctor would have to treat 7.77 (PDP) patients with Nuplazid to achieve the $1b in revenue.

Thank you for reading.
 

Nuplazid Gets FDA Approval

Acadia Pharmaceuticals Nuplazid, was FDA approved on Friday for the indication of Parkinson's Disease Psychosis, and will carry a warning as seen below.
 

IMPORTANT SAFETY INFORMATION AND INDICATION

INCREASED MORTALITY IN ELDERLY PATIENTS WITH DEMENTIA-RELATED PSYCHOSIS
Elderly patients with dementia-related psychosis treated with antipsychotic drugs are at an increased risk of death. NUPLAZID is not approved for the treatment of patients with dementia-related psychosis unrelated to the hallucinations and delusions associated with Parkinson’s disease psychosis.

QT Interval Prolongation: NUPLAZID prolongs the QT interval. The use of NUPLAZID should be avoided in patients with known QT prolongation or in combination with other drugs known to prolong QT interval including Class 1A antiarrhythmics or Class 3 antiarrhythmics, certain antipsychotic medications, and certain antibiotics. NUPLAZID should also be avoided in patients with a history of cardiac arrhythmias, as well as other circumstances that may increase the risk of the occurrence of torsade de pointes and/or sudden death, including symptomatic bradycardia, hypokalemia or hypomagnesemia, and presence of congenital prolongation of the QT interval. 

 
Bottom Line:  Now it's on to commercialization.  Thank you for reading. 

 

Nuplazid: FDA Safety Label

Acadia Pharmaceutical's completed their advisory committee meeting (ADCOM) on March 29th.  After receiving a positive review from the committee, the next issue to be determined will be the box safety labeling.  Below is wording from the FDA Briefing Documents.

This sample of patients compared to their appropriate control group demonstrates more than double the risk of serious adverse events (SAE) in the PDP6 trial population (Observed Risk of death or SAE is 2.38 times greater [95% CI 1.00 to 5.73, p=0.05]) for 34 mg Pimavanserin vs. placebo.

Let's have a look at a mortality black box label that many of the anti-psychotics currently carry, including the newly approved Rexulti (brexpiprazole) for Acute Schizophrenia and as adjunct for Major Depression Disorder. 

Increased Mortality in Elderly Patients with Dementia-Related Psychosis
Elderly patients with dementia-related psychosis treated with antipsychotic drugs are at an increased risk (1.6 to 1.7 times) of death compared to placebo (4.5% vs 2.6%, respectively). Although the causes of death were varied, most of the deaths appeared to be cardiovascular (e.g., heart failure, sudden death) or infectious (e.g., pneumonia) in nature. REXULTI is not approved for the treatment of patients with dementia-related psychosis.

I think the above is a likely label scenario for Nuplazid.  In addition, the FDA may advise Acadia to run a phase 4 confirmatory clinical trial as part of approval.  

Bottom Line:  Acadia has completed some nice pre-marketing research for Nuplazid, and found that a black box warning label was not high on the list of doctors when deciding whether or not to prescribe this drug.  In other words, they would still prescribe the drug, as the best alternative for an unmet need regardless of the safety label, as Nuplazid has shown in clinical trials to not contribute to motor impairment.   May 1st, is the scheduled day that the FDA should approve the drug.  Thank you for reading.

Nuplazid: FDA Briefing Documents

Acadia Pharmaceuticals drug Nuplazid, for Parkinson's Disease Psychosis (PDP) should get FDA approval by May 1st.  The link to the documents are here FDA AdvisoryCommittee. The Advisory Committee (ADCOM) will meet on Tuesday to give their opinion on the efficacy and safety of the drug.  Nuplazid will be the only drug approved to treat the disease, and will have patent protection to 2028, prior to any Hatch-Waxman additions.  The labeling for the drug will be revealed upon approval.  I am expecting a black-box label at that time.  Thank you for reading.

Acadia Pharmaceuticals ($17.26)

We started back into Acadia Pharmaceuticals today, after being extremely patient, since selling shares the morning that the CEO announced resignation in March 2015.  We wrote about that here, Acadia CEO Resigns - Effective Immediately.  Fundamentally not much has changed with their lead drug Nuplazid.  They have an FDA potential approval date of May 1st, 2016.  A list of important reiterating facts are below. 

-Nuplazid will be the only approved drug for Parkinson's Disease Psychosis (PDP).
-Their patent runs through 2028 (prior to any Hatch-Waxman addition) in the U.S. and 2025 in the EU.  So approximately 12 years of exclusivity U.S., unless a new drug comes to market during that time frame.  
-The drug could receive premium pricing up to around $15,000 per year for PDP patients, and be seen as a cost savings for family and the medical system.
-Nuplazid may have the potential to treat Alzheimer's Agitation, which at present is another unmet need, as the company plans to run a phase 2 clinical trial mid 2016.  
-The drug could potentially be used as maintenance therapy for schizophrenia patients, as a safer alternative to current anti-psychotics.  
-The company currently has around 124 mn shares outstanding.
-Their cash position is around $500 mn.  
-ADCOM (advisory committee) will meet on March 29th.


Bottom Line:  A weak overall market and biotechnology in particular, has allowed us to buy back shares of ACAD at reasonable prices.  I am expecting a black box warning label upon approval around May 1st, but do not believe that will have a major impact on the success of Nuplazid for PDP.  Thank you for reading. 
 

Acadia Phamaceutical - New High ($45.88)

Speculation that there is a buyout coming for ACAD today, has led the stock higher by 17%.  But I believe the advance in the stock today, is due to the planned filing of their NDA (new drug application) for Nuplazid, for Parkinson's Disease Psychosis or (PDP), and an analyst price reiteration at noon.  Either way the stock is getting a nice upside lift today, even as the overall market is selling off. Below is a daily chart of ACAD.

 

ACAD: Fourth Quarter Conference Call ($37.78)

The company reiterated their timeline for filing the new drug application (NDA), with the FDA, for the indication of Parkinson's Disease Psychosis, in the first quarter of 2015.  The company also gave more confidence in starting a phase 2 clinical study for patients with Parkinson's Disease who have experienced sleep disturbances. That trial is expected to start in the first half of 2015.  The currently running phase 2 Alzheimer's Disease Psychosis (ADP) trial is expected to complete, and announce data mid year 2016.  The timeline to announce that data has been steadily pushed back in time, previously stated as a two year trial (November 2013 - November 2015) to around two and a half years now. The company has stated that patient selection for the study is a critical process for trial success.  The stock is trading near all-time highs, with a market cap of approximately $3.8 billion. Below is a daily chart.  Thank you for reading.

 

Top Selling Drugs in 2014

The top selling U.S. drugs by sales (as opposed to prescriptions) in 2014 are listed below. The sales were tracked on a 12 month rolling basis from mid 2013 to mid 2014 by research firm IMS Health.

1.  Abilify $7,240 billion
2.  Humira $6,310
3.  Nexium $6,303
4.  Crestor $5,672
5.  Enbrel $5,097
6.  Advair Diskus $5,064
7.  Sovaldi  $4,469
8.  Remicade $4,342
9.  Lantus Solostar $3,829
10. Neulasta $3,688

Abilify achieved the number one spot in 2014 despite receiving an FDA issued black box warning in 2006.

Elderly people with psychosis related-dementia treated with antipsychotic 

medicines including ABILIFY, are at an increased risk of death compared to placebo. ABILIFY is not approved for the treatment of patients with dementia-related psychosis.

I continue to believe that Acadia Pharmaceutical's drug Nuplazid will become palliative care for the elderly, and follow in the footsteps of Abilify, on a sales growth basis over time. The drug has shown an improved safety profile to that of other atypical antipsychotics already approved. The company has mentioned that a clean label is highly probable when Nuplazid gets approval for Parkinson's Disease Psychosis in 2015.  A clean label for Nuplazid could prompt Neurologist and Psychiatrists to switch at a high rate, and prescribe the drug more readily off-label for similar indications. Sales will likely start strong, as new patients will be prescribed Nuplazid for Parkinson's Disease Psychosis (PDP), existing patients under another therapy will switch at a high rate, and the drug could eventually become an add-on, to existing therapies in other areas, such as cognition. Thank you for reading.   

Lundbeck

When considering major players in the CNS (central nervous system) market, Lundbeck is a name that comes to mind.  The company's corporate office is located in Copenhagen, Denmark with locations worldwide.  This post will take a look at it's current top CNS products and pipeline of potential drugs in trials.

Alzheimer's
Ebixa (memantine) for moderate to advanced AD.  For memory and cognition.

Parkinson's Disease
Azilect  (rasagiline) to treat signs and symptoms of PD,

Schizophrenia
Abilify Maintena  Atypical anti-psychotic for the treatment of Schizophrenia.  Extensively used off-label for MDD (major depressive disorder), and Bi-Polar.

Current Trials:
Lu AE58054  as an adjunct to Donpezil.  For mild to moderate AD.
NCT01955161 ADAS
Ph 3 Results - 2015
Ph 2 results - 90 mg achieved .004 at 24 weeks.

Brexpiprazole  Agitation associated dementia of the Alzheimer's type.
NCT01862640 CMAI
NCT01922258
Ph 3 Results - 2017

Brexpiprazole  Many trials for (MDD) Major Depressive Disorder and Schizophrenia as adjunct or mono-therapy.

From the Lunbeck website, there is not an approved drug for either Parkinson's or Alzheimer's disease psychosis that is safe for the elderly unlike Nuplazid is deemed to be. Abilify is black boxed for use in the elderly population experiencing psychosis related to dementia.

Brexpiprazole is currently in a phase 3 trial for agitation associated with dementia of the Alzheimer's type.  Within that trial, listed under other measures, is the NPI-NH, and Psychosis Subscale Score. So there will be a readout for hallucinations and delusions along with the primary outcome measure of agitation.  Thank you for reading.
 

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 Pimavanserin Sleep Study 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, or ramelteon for patients with Alzheimer's disease that experience sleep disturbances.  There was some evidence to support a low dose of trazodon (50mg), but larger trials were needed to reach a definitive conclusion.  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.