Actionable news
0
All posts from Actionable news
Actionable news in RLYP: RELYPSA Inc,

ACADIA Pharmaceuticals: Where The Shorts Went Wrong

Summary

As of May 13th, there were over 22 million shares short in ACADIA Pharmaceuticals.

This makes up about 30% of the 88 million shares in the float.

The short interest of the available-to-trade float is something like 70%.

ACADIA Pharmaceuticals' (NASDAQ:ACAD) drug, Nuplazid, offers a unique and novel way to treat Parkinson's disease psychosis. By targeting only the 5-HT2A receptor, the drug can reduce the psychosis in a patient without jeopardizing the motor functions of the patient.

Additionally, with trials in Alzheimer's disease psychosis and Alzheimer's agitation, it is possible that the Nuplazid label can be expanded over time. Additionally, it is likely the company will also initiate trials in further indications at some point later this year.

The opportunities are large with this drug. Nuplazid is priced at approximately $24,000 annually. With a PDP population in the US of 400,000, which is 40% of the nearly 1 million PD patients, the total potential revenue for the company could grow quickly. My estimate is for ACADIA to capture about 130k patients, which could put potential revenue at $3.1 billion. The stock currently only trades a little bit more than 1x revenues by my estimate.

However, despite all of the positives, there are a plenty of investors who are negative. As of May 13th, there were over 22 million shares short in ACADIA Pharmaceuticals. This makes up about 30% of the 88 million shares in the float. The shorts started piling into the...


More