BMO cuts Acadia Pharmaceuticals stock price target on trial miss

BMO Capital reduced its price target on Acadia Pharmaceuticals Inc. (NASDAQ:ACAD) stock to $34, maintaining an Outperform rating. The stock price dropped 7.4% over the past week, trading at $22.93 following the trial results. The firm lowered its probability of success estimate for Acadia's drug candidate from 40% to 35% after the RADIANT trial results.

BMO Capital highlighted that the trial miss poses a near-term challenge for Acadia shares. The company's commercial portfolio remains strong due to Nuplazid and Daybue. Acadia generated $1.14 billion in revenue last year, with a market cap of $3.93 billion. Analysts noted a valuation disconnect, even under conservative remlifanserin assumptions, with InvestingPro suggesting the stock is undervalued, offering an average upside potential of 33%.

Acadia also announced a preliminary court approval of a settlement in a stockholder derivative action. The Phase 2 results of Acadia's RADIANT study for remlifanserin in Alzheimer’s disease psychosis narrowly missed the primary endpoint but achieved nominal significance on a key secondary endpoint.