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Nuplazid for Long-Term Care: Revenue Driver for Acadia?

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Long-term care

Acadia Pharmaceuticals (ACAD) plans to focus on long-term care (or LTC) facilities to boost Nuplazid’s adoption in the Parkinson’s disease (or PD) psychosis indication. PD patients who are admitted to a long-term care facility are found to be generally suffering with psychosis. So long-term care can prove to be a major source of new patients for Nuplazid. With the new nursing home interpretive guidance recognizing PD psychosis as a progressive disease, Nuplazid may further position itself as a necessary intervention for patients in LTC settings.

Acadia Pharmaceuticals previously estimated its business exposure to the specialty distributor channel at around 20.0%. However, the company now expects to earn up to 25.0% of its business from this channel that services LTC facilities and programs such as Veteran Affairs and TRICARE.

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If Acadia Pharmaceuticals manages to effectively leverage the growth opportunity available for Nuplazid in the LTC setting, it may have a favorable impact on ACAD stock as well as the stock of the Vanguard Small-Cap Growth ETF (VBK). Acadia Pharmaceuticals makes up about 0.23% of VBK’s total portfolio holdings.

Label expansion

In addition to PD psychosis, Nuplazid (pimavanserin) is being explored in multiple neurology indications. The drug has demonstrated efficacy and safety in Phase 2 trials that are evaluating it in Alzheimers’ disease psychosis. The company has also completed an end of Phase 2 meeting with the FDA (U.S. Food & Drug Administration) to discuss results from the Phase 2 trials and design a Phase 3 trial, expected to begin in late 2017. Additional data from the Phase 2 trials are expected to be released in the presentation at the clinical trials on Alzheimer’s disease meeting.

Since there are no FDA-approved medications for AD psychosis, this indication may prove to be a solid growth driver for Nuplazid. Nuplazid is thus expected to enable Acadia Pharmaceuticals to become a prominent antipsychotic player similar to its peers Novartis (NVS), Pfizer (PFE), and Allergan (AGN).

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