In a report released yesterday, Tazeen Ahmad from Bank of America Securities maintained a Hold rating on ACADIA Pharmaceuticals (ACAD – Research Report), with a price target of $23.00.
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Tazeen Ahmad’s rating is based on ACADIA Pharmaceuticals’ strategic focus on leveraging its commercial revenues to enhance its R&D pipeline, which shows potential but also carries inherent risks due to the challenging nature of neurology drug development. While the company is making strides with its next-generation Nuplazid, ACP-204, targeting Alzheimer’s disease psychosis and Lewy body dementia psychosis, the need for further clinical validation remains a concern.
Additionally, ACADIA’s efforts to carve out a market segment in Prader-Willi syndrome with ACP-101 and explore a safer ketamine approach in major depressive disorder indicate promising avenues. However, the mixed results from previous studies and the competitive landscape, as seen with the recent approval of Soleno’s Vykat XR, contribute to the cautious outlook. These factors, combined with the company’s current market valuation and price objective, justify the Hold rating as investors await more definitive outcomes from ongoing and future studies.
In another report released on June 23, Morgan Stanley also maintained a Hold rating on the stock with a $24.00 price target.