ACAD
Colgado en IV. Los datos (lo poco que se sabe ya que es un interim parado por una empresa externa) pintan muy bien realmente.
A Harmonious Beginning to the Fall for ACAD
Price: $23.80
06 Sep 2019
Biotechnology – Large Cap
Cory Kasimov
Gavin Scott
Matthew T Holt, Ph.D.
Neena M Bitritto-Garg, CFA
J.P. Morgan Securities LLC
We view the Phase 3 HARMONY trial stopping for positive efficacy as a clear win for
ACAD. We liked the risk/reward into this planned interim analysis (note here) given
our confidence in the relapse-prevention trial design and its historic success rate, even
if not specifically for dementia related psychosis (DRP). While data details are limited
(not surprising as this was an interim look), we expect this result to support Nuplazid's
approval in DRP (a commercial drug with BTD and no approved therapies for this
indication) and drive this product to “blockbuster” status (DRP 10x > PDP).
Importantly, we also see multiple additional positive read-throughs from today’s
development beyond DRP, including 1) it further validates the current PDP indication
/ Nuplazid’s safety profile and could drive greater traction in that setting; 2) it adds to
our confidence in MDD, which has more supportive data and is also being evaluated
in a straightforward trial; and 3) it may greatly add to ACAD’s scarcity value now that
the company has a clearer path to billion-dollar-plus sales with a wholly owned CNS
asset. Reiterate Overweight rating.
Quick Takes from the Conference Call
· Not surprisingly, details on the call were limited as this was an interim analysis and
thus the company does not yet have the full data set.
· In terms of stopping criteria, Nuplazid achieved statistical superiority over placebo
in time to relapse of dementia-related psychosis (DRP) at the planned interim
analysis (p < 0.0033).
· Response rates in the open-label portion of the study exceeded the company’s
assumptions (based on prior ADP and PDP response rates).
· Roughly 20% of patients in the open-label run in that made it to 8 weeks of
treatment did not meet the response criteria to be eligible for randomization at 12
weeks. A small % of patient discontinued for other reasons.
· The subtypes of DRP matched the overall epidemiology of the disease: ~67% ADP,
15% PDP, 10% vascular dementia, <10% dementia with lewy bodies, and <5%
frontotemporal dementia.
· Approximately 90% of patients were on the 34mg dose of Nuplazid and 10% dose
titrated down to the 20mg dose.
· Safety in the open label portion was consistent with prior data, and no concerns were
observed in the blinded safety reviews post randomization.
· Full data will be presented at an upcoming medical meeting that’s TBD (we suspect
CTAD in Dec or one of the many neuro/psych meetings in 1H). It's also possible that
ACAD updates investors in the interim as they analyze the data.
· It will take a few months for the company to shut down the trial and clean/analyze
all the data. Pending a meeting with the FDA, mgmt expects to submit a sNDA in
2020; we expect on the earlier side of the year (recall this is a supplemental filing
and key items such as CMC are already established).
· It’s also worth restating that the product has breakthrough therapy designation
(BTD) and that there are no approved therapies for DRP.
· DRP represents a blockbuster opportunity in the US alone, with 1.2M patients...or
about 10x larger than the currently approved PDP indication.
· ACAD’s EU strategy for Nuplazid remains TBD. We continue to suspect that they
will ultimately use DRP or MDD as the trigger to file overseas.
