Acadia stock ‘tracking to the lower half of guidance’ says Morgan Stanley By Investing.com

On Wednesday, Morgan Stanley adjusted its stance on Acadia Pharmaceuticals (NASDAQ:ACAD) stock, downgrading it from Overweight to Equalweight and reducing the price target to $20.00 from the previous $28.00. The investment firm’s decision came after evaluating the company’s second-quarter performance, which showed mixed results in its product sales.

Acadia Pharmaceuticals reported that while revenues for Nuplazid, its drug for Parkinson’s disease psychosis, exceeded market expectations, sales for Daybue, a treatment for dementia-related psychosis, did not meet the anticipated growth due to slower net patient additions.

The anticipation around the second-quarter results was high, especially since there were concerns about the launch trajectory of Daybue following a higher-than-expected rate of patient discontinuations in the first quarter.

The management of Acadia Pharmaceuticals has indicated improvements in patient discontinuations compared to the previous quarter, attributing the initial surge to a large influx of patients in the third and fourth quarters of 2023. They also expressed that the situation is now under control.

However, Morgan Stanley suggests that investors are likely to remain cautious and will look for confirmation from future quarters that the rate of new patient starts is indeed accelerating.

Furthermore, Acadia’s management mentioned that while they are on track to meet the lower end of their revised guidance range, there is potential to reach the higher end if their initiatives yield positive outcomes.

Despite this, Morgan Stanley has adopted a more conservative view, particularly because the second quarter is traditionally strong, and the performance in this period could set the tone for the year.

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