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Parkinson’s disease is a chronic, progressive neurological disorder that results in a degeneration of neurons in the region of the brain that controls motor function. There are roughly 1.5 million new cases of Parkinson’s in the U.S. each year, representing a $3 billion therapeutic market.

Parkinson’s disease patients often have a significant shortage of the neurotransmitter dopamine. Acaida Pharmaceuticals (ACAD) estimates that roughly 30-40% of the patients receiving dopamine replacement therapy (DRT) have some sort of treatment induced psychosis – auditory and visual hallucinations, and delusions are the most common. It is a significantly debilitating side effect and foreshadows the worsening of the underlying disease. The average Parkinson’s patient lives only 4.4 years after developing PDP. Within two years of developing the disease most patients require hospitalization. The average life expectancy after hospitalization is only 2.0 years.

Acaida Pharmaceuticals is developing pimavanserin, a potent and selective 5-HT2A inverse agonist, in phase 3 trials for the treatment of Parkinson’s disease psychosis (PDP). Pimavanserin was designed to modulate dopamine transmission by decreasing dopamine release in the brain regions where excessive dopaminergic transmission underlies psychosis, and by increasing dopamine release in brain regions where low levels of dopaminergic activity may cause cognitive deficits.

Previous Work In PDP

Management has tested the drug in two previous phase 3 trials. High placebo responses, specifically in centers outside the U.S., doomed these two trials (Study-012 and Study-014). However, we think there were clear signs of efficacy in those programs. Below are data read-outs from -012 showing the high placebo response in the global population, and the more consistent data in the U.S., on the primary endpoint of antipsychoitic efficacy assessed by the Scale for the Assessment of Positive Symptoms (SAPS). Management stopped the -014 trial early after -012 failed, even though there was clear separation on both the SAPS and CGII endpoints (below, click to enlarge).

Changes in the Current Phase 3 Trial

In late July 2010, Acadia initiated a third phase 3 program in PDP (Study-020), this time in the U.S. only. Study-020 is expected to enroll about 200 patients, and will test oral doses of either 40 mg of pimavanserin or placebo once-daily for six weeks in patients with Parkinson's disease. Patients also will continue to receive stable doses of their existing dopamine replacement therapy (DRT) used to manage the motoric symptoms of Parkinson's disease.
The primary endpoint is antipsychotic efficacy as measured using a group of nine items from the hallucinations and delusions domains of the Scale for the Assessment of Positive Symptoms (SAPS), assessed using centralized ratings. Motoric tolerability will be a key secondary endpoint in the trial and will be measured using Parts II and III of the Unified Parkinson's Disease Rating Scale (UPDRS).
The goal of the program is to correct some of the high placebo response witnessed in the two previous phase 3 trials. We note several changes to Study-020 that we believe will aid in the success of the trial.
  • Firstly, the trial will test only 40mg pimavanserin vs. placebo in a 1:1 randomization. The previous two programs had 3 arms at a 2:1 randomization (10mg and 40m vs. placebo). Reducing the randomization to 1:1 should help reduce the perception that patients believe they are on drug. It also reduces the statistical hurdle that is required to meet significance to p<0.05. Management saw strong results from the 40mg cohorts during the -012 and -014 trials. We are confident in the efficacy here.
  • Second, management will increase the entry criteria of the MPI minimum score required at screening and SAPs score at baseline to target a more severely affected population. The previous trials, which allowed less sick patients to enroll, saw a high placebo response as a result. Management noted that sub-set analysis of the sicker patients saw significantly less placebo-response and greater efficacy with pimavanserin.
  • Third, management will employ a two-week structured social therapy lead-in period in order to help pull initial placebo responses ahead of the assessment period. The goal here is to standardize the baseline so that the initial placebo response is muted. This may lower the absolute efficacy figures on pimavanserin compared to the -012 and -014 programs, but should work to create greater separation between pimavanserin and the placebo, which is the ultimate goal of the trial.
  • Fourth, management will conduct fewer patient visits during the active dosing portion of the trial. This will limit the interaction between the Parkinson’s patient and the clinician, which may have resulted in improved perception in disease psychosis during the first phase 3 (-012) trial. For example, the patients in the first trial received a significant step-up in quality of care relative to non-participating patients. The additional visits and monitoring of these patients seems to have led to a lower frequency of psychotic episodes. Management has reduced the planned visits in the -020 program to better assess the efficacy of pimavanserin in a more traditional setting for the patient.
  • Fifth, management has made these refinements to the SAPS endpoint through analysis of the two previous PDP programs, -012 and -014. The new set of nine items (down from 20) from the hallucinations and delusions domains of SAPS best captured the expression of psychosis in PDP patients. By refining the endpoint, the company believes it can reduce variability and enhance sensitivity of the measure for demonstrating treatment response in PDP. This new modified SAPS endpoint, to be assessed using centralized ratings, has been accepted by the U.S. FDA.
  • And finally, the -020 trial will enroll a more homogeneous patient population. The -012 program enrolled patients in seven different countries (U.S., U.K., France, Bulgaria, India, Russia, and Ukraine). Standards of care and patient characteristics differed from the U.S. and, for example, India or Russia. U.S. patients were more predictable and consistent with what was expected versus Eastern Europe or India. The -020 study will enroll patients in the U.S. only.
Acadia continues to conduct an open-label safety extension study (-015) that enrolled patients who completed either of two earlier phase 3 PDP trials. Patients who complete the -020 study will also will have the opportunity to enroll in the -015 if the treating physician agrees the patient will benefit from continued treatment with pimavanserin. Data from Study-020 will be available mid-2012. We note some patients from a previous phase 2 program have been on pimavanserin open-label for nearly five years. We think the safety profile of the drug is outstanding.

We believe the -020 trial and the -015 open label extension study will provide the necessary long-term data required by ICH guidelines for approval of a new chemical entity in this indication. If this trial is successful, we expect Acadia to secure a development and commercialization partnership for pimavanserin that will fund another phase 3 trial in PDP, and potentially new phase 2 and 3 trials with pimavanserin in Alzheimer's disease psychosis and schizophrenia.

Cash Position Solid

Acadia's cash position is solid. In January 2011, management raised just over $14 million. We estimate the current cash balance is around $45 million. The company also has earlier-stage development programs with Allergan (AGN) for the treatment of glaucoma and neuropathic pain, and with Meiji Seika to develop a new class of pro-cognitive antipsychotic drugs. Acadia is also working on preclinical candidates for Parkinson's disease through a grant from the Michael J. Fox Foundation.

Acadia's stock has tripled from December 2010. We believe investors are returning to the story given the improved cash position and increased confidence in the ongoing phase 3 trial.

Source: Optimistic on Acadia: Solid Cash Position, Increased Confidence in Phase 3 Trial