Seeking Alpha
Recommended for you:
, stockmatusow (872 clicks)
Long/short equity, deep value, value, research analyst
Profile| Send Message|
( followers)  

Acadia Pharma (NASDAQ:ACAD).

Acadia announced today successful top-line results from its pivotal Phase III trial evaluating the efficacy, tolerability and safety of Pimavanserin in patients with Parkinson's disease psychosis (PDP). Pimavanserin is Acadia's proprietary, non-dopaminergic product candidate that selectively blocks serotonin 5-HT2A receptors. Pimavanserin met the primary endpoint in the Phase III trial by demonstrating highly significant antipsychotic efficacy as measured using the 9-item SAPS-PD scale (p=0.001). Pimavanserin also met the key secondary endpoint for motoric tolerability as measured using Parts II and III of the Unified Parkinson's Disease Rating Scale, or UPDRS. These results were further supported by a highly significant improvement in the secondary efficacy measure, the Clinical Global Impression Improvement, or CGI-I, scale (p=0.001). In addition, clinical benefits were observed in all exploratory efficacy measures with significant improvements in nighttime sleep, daytime wakefulness and caregiver burden. Consistent with previous studies, Pimavanserin was safe and well tolerated in this Phase III trial.

However, the company needs to conduct another Phase III trial of Pimavanserin in Parkinson's patients in order to confirm Tuesday's results. Two previous late-stage studies of the drug failed to demonstrate a significant reduction in psychotic episodes - this is why I believe it's a sure fire short-sell currently.

Amicus Therapeutics, Inc. (FOLD)

A potentially big catalyst coming up for Amicus is the release of the phase III results related to its medication for Fabry disease.

On September 6th, Amicus issued a press release to update the screening profiles related to this study. Labeled study 011, this is one of two ongoing Phase 3 studies of migalastat HCl monotherapy being conducted by Amicus and GlaxoSmithKline (GSK).

The primary endpoint target in Study 011 is a change in interstitial capillary GL-3 as measured in kidney biopsy at 6 months versus baseline. The six month primary treatment period in Study 011 was completed in the second quarter of 2012 and the six-month follow-up period is expected to be complete in December 2012. Amicus and GSK will also un-blind and analyze data from the primary six month treatment at this time. Currently, both companies remain blinded to all results.

There has been historic difficulty in finding successful treatments for rare genetic diseases. If Amicus can show successful phase III data here, it could very well be like a "Kodak" moment in medicine's war against genetic diseases.

Amicus has the potential to be a double from its current price level on positive Phase III data, much like we have seen this morning with Acadia - in my opinion. Also, GSK owns 20% of Amicus, so a buyout is possible on positive data here, as this has been GSK'S M.O in the past. Because of these factors, Amicus could easily see a double in its stock price as we saw with Acadia this morning. With a market cap of $260.49M and GSK already owning 20% of the company, I can easily see a buyout price of $600M which would cost GSK a lot less due the above mentioned fact of current ownership in the company.

Anacor Pharmaceuticals (ANAC)

Anacor has seen a recent spike in its stock price as traders and investors have begun to take notice of several catalysts upcoming in the near term for the company.

Anacor plans to announce top-line data for Tavaborole in January 2013 for the first Phase III trials related to this drug in treating Onychomycosis. Six weeks later, the company expects the second trial results to be publicized for this same indication. Onychomycosis is a fungal infection of the nail and nail bed that affects approximately 35 million people in the United States. The company plans to file an NDA for tavaborole in mid-2013, subject to the results of the phase three trials.

By the end of this year, Anacor plans to announce data from the phase two safety, pharmacokinetics, and efficacy study related to AN2728. AN2728 is a topical anti-inflammatory product candidate for the treatment of dermatitis and psoriasis in adolescents. The company expects to initiate phase two trials in children ages 2-11 shortly after the announcement of these results. Atopic dermatitis is a chronic rash characterized by inflammation and itching and affects an estimated 10% to 20% of infants and young children. Psoriasis is a chronic inflammatory skin disease that affects approximately 7.5 million people in the United States and over 100 million people worldwide.

The treatment, if eventually FDA approved, would compete against Sanofi's (NYSE:SNY) Penlac and Novartis' (NVS) Lamisil.

To offer an idea of the potential market for Tavaborole, Penlac at its peak realized $330M world wide sales, while Lamisil realized $1.2B in peak sales. If Tavaborole ultimately gains FDA approval, the treatment could prove itself a very strong revenue generator for Anac.

Based on its current market cap of $199.54M, Anac seems rather undervalued at this level. A stock price of at least $6 a share is where it should be trading in my opinion, with a longer term price that should be seeing $10 a share, if everything goes correctly for the company.

Source: BioPharma Stocks On The Move Today And For The Rest Of The Week

Additional disclosure: Disclaimer: This article is intended for informational and entertainment use only, and should not be construed as professional investment advice. They are my opinions only. Trading stocks is risky -- always be sure to know and understand your risk tolerance. You can incur substantial financial losses in any trade or investment. Always do your own due diligence before buying and selling any stock, and/or consult with a licensed financial adviser.