Shares of Acadia Pharma (ACAD) plunged Tuesday after the company reported after the close on Monday that its Phase 3 ADVANCE-2 trial did not meet its primary endpoint.
The company's stock price is down more than 15% at $20.48 per share following the news.
The Phase 3 ADVANCE-2 trial was evaluating pimavanserin for the treatment of negative symptoms of schizophrenia. ACAD said pimavanserin did not demonstrate a statistically significant improvement over placebo.
"We are disappointed the trial did not meet its primary endpoint given the significant unmet need in patients with negative symptoms of schizophrenia," said Steve Davis, Acadia's CEO.
Davis said while the company will continue to analyze the data with its scientific advisors, they do not intend to conduct any further clinical trials with pimavanserin.
Reacting to the news, analysts at Mizuho downgraded Acadia to Neutral from Buy, lowering the price target to $25 from $39 per share.
"Given the failed ADVANCE-2 trial, we remove our sales forecast for Nuplazid in negative symptoms of schizophrenia (NSS)," said analysts at the firm. "Our new $25 PT incorporates value for Nuplazid in Parkinson's disease psychosis (PDP), Daybue with ~$1B peak sales, and potential Nuplazid IP extension into 2038 for PDP."
Mizuho also said there are no near-term major catalysts in 2024 for the stock, with the next major catalyst potentially arriving in late 2025/early 2026.