Chris Lau
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Chris Lau in Value Stocks,

​Expect Recovery After Secondary Offering Sinks ACADIA Pharmaceuticals

Biotech (IBB) volatility is expected of the sector. Worries of cash running out or poor clinical results will sink biotech stocks.

ACADIA Pharmaceuticals (ACAD) is putting selling pressure on its stock after its $200 million secondary offering. Fortunately, the company will have $600 million in cash on its balance sheet after the share sale.

ACAD is a wait and see. With no Alzheimer's disease psychosis (ADP) results until the fourth quarter, at the earliest, the stock may move in a random direction. Any macro crises, though will sink the stock.

Nuplazid sales data will also squeeze shorts (16.67 percent of float) if they are good. Few, if any analyst, attribute any ADP sales. When the company reports next quarter’s results, look carefully at Parkinson’s Disease Psychosis (PDP) sales.

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