Acadia Pharmaceuticals Inc (NASDAQ:ACAD) stock ticked up 1.9% in premarket trading Monday after Mizuho analyst Uy Ear moved the recommendation to Outperform from Neutral and raised the price objective to $35.00, up from $29.00.
The upgrade is anchored in Mizuho’s view that Acadia’s remlifanserin, also identified as ACP-204, is not receiving full credit from the market. Ear singles out the company’s Phase 2 RADIANT study in Alzheimer’s disease psychosis as a catalyst that could change investor perceptions if the program delivers favorable data.
Ear argued that investor attention has been excessively concentrated on Acadia’s earlier setback - the disappointing 2019 results from pimavanserin’s Phase 3 HARMONY trial in Alzheimer’s disease psychosis. According to the analyst, HARMONY was under-powered and relied on what he characterizes as a suboptimal 34 mg dose. By contrast, remlifanserin is framed by Mizuho as a second-generation molecule that is both more potent and safer than pimavanserin.
The analyst also points to prior clinical signals that offer cautious encouragement. In pimavanserin’s Phase 2 study, the drug produced a 1.84-point improvement versus placebo on the NPI-NH at week 6 - a benefit that Ear notes is just below the 2-to-3 point threshold some key opinion leaders cite as clinically meaningful. Mizuho expects the RADIANT trial to benefit from being appropriately powered and from testing a higher 60 mg dose, factors the firm believes could enhance efficacy and reduce binary trial risk.
On valuation, Mizuho models unadjusted peak sales for remlifanserin at $2.5 billion and adjusted peak sales at $1.6 billion. Those top-line assumptions are calculated to add roughly $10 on a risk-adjusted basis to Ear’s $35.00 price target. The firm’s estimate is partially offset by two headwinds reflected in the valuation: the removal of European Union Daybue sales and the potential for Nuplazid pricing pressure under the Inflation Reduction Act.
Analysts and investors will likely watch RADIANT closely for signs that the combination of trial design and a higher 60 mg dose can produce a clinically meaningful effect. Until those data arrive, market sentiment may remain sensitive to legacy results from prior pimavanserin studies and to the commercial assumptions that Mizuho adjusted in its model.