LeoPatrizi
ACADIA Pharmaceuticals, trading under the symbol NASDAQ:ACAD, experienced a turbulent day after its recent Q2 financial results. Despite an initial beat, which would typically bring a euphoric buzz to shareholders, the company found itself on the receiving end of a stock downgrade from none other than Morgan Stanley on Wednesday.
According to reports, the downgrade was instigated by Morgan Stanley’s concern over ACADIA’s newly launched therapy for brain disorders, known as Daybue. This product, aimed at addressing patients with the neurodevelopmental disorder Rett syndrome, managed to bring in $84.6 million in net product sales. However, despite this seemingly impressive figure, the therapy fell short of the market’s expectations.
Daybue’s inability to meet the $90 million consensus forecast left analysts scratching their heads, especially with ACADIA’s flagship revenue-driver Nuplazid outshining expectations by generating $157.4 million in net product sales, vastly surpassing the projected $147 million.
Morgan Stanley’s Jeffrey Hung expressed cautious sentiments regarding Daybue’s future, stating, “Despite Daybue’s long-term prospects in treating Rett syndrome, we await greater clarity on longer-term patient dynamics and whether the company’s initiatives can truly translate to increased adoption.” As a result, the stock was downgraded from Overweight to Equal Weight.
Further complicating matters, ACADIA revised its full-year net sales outlook for Daybue and adjusted the figures for Nuplazid. This move prompted the analyst to review his earnings estimates, consequently leading to a revision of the price target on the stock from $28 per share down to $20.