Acadia (ACAD): Will FDA Be Convinced by Placebo Effect “Run-In”?

Research Done 12.21.2014
Post Written on 2.6.2015

Unmet medical needs

Psychosis of Parkinson's Disease is tough and dangerous for patients. It is also a burden to care givers. Current drugs (mostly used off-label) either simply put patient down or have bad side effects on motor neuron, which make disease worse.

Almost everything with Acadia looks good. Briefly:

Science is great: first highly specific inhibitor against 5-HT2A receptor.

Competitor: none. They either are discontinued or have major problems.

Side effects eliminated. No detrimental effect on motor neuron.

Platform good: company has an efficient cellular-based drug screening system. It found Nuplazid. This platform could be a gold mine.


Nothing on earth is perfect. Nuplazid is no exception. It ran into a common problem in neurodegenative disease - placebo effect (read more here). In its first phase 3 (2009), Nuplazid didn't have any benefit over placebo [link]. This sent ACAD to less than $1/share in late 2010.

The team at Acadia didn't give up. They (perhaps first in the world) creatively used "run-in period" to put placebo effect under control in the second P-III trial. So finally there are some benefit over placebo group. Now stock price is back up at $30+ -- "one of the most miraculous come back in pharmaceutical industry."

The question remains, will FDA be convinced?

"One of the best things to do when a patient first learns of the diagnosis of Parkinson's disease is to join a clinical trial." Among the many benefits of such participation may be the placebo effect! -- by J. Stephen Fink, MD, PhD

Chance of approval.

As 1) a small company, 2) first time NDA, 3) in neurology sector, ACAD's chance of first cycle approval is less than 50%. Considering high stock price, PSIC is not participating before first round decision.

Two trajectories for ACAD:

  • 1st cycle approval. Continue to rise until acquired by some big pharma.
  • 1st cycle CRL (PSIC favors):
    • Continue to rise along with NDA filing and big market;
    • Around FDA advisory panel meeting, may see some drama (ups and downs)
    • Drop big after CRL, how big depends on additional clinical trial or not.
    • Come back again in 1 - 4 years with 2nd cycle approval.