Acadia Pharmaceuticals Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023; balance sheet compared with December 31, 2022. Acadia develops and commercializes medicines for central nervous system disorders and rare diseases. NUPLAZID was its sole revenue source in Q1; FDA-approved DAYBUE became available in the U.S. in April 2023, after the quarter.
Key financial results
Amounts in millions, except per-share data and percentages.
| Metric | Q1 2023 | Q1 2022 / comparison |
|---|---|---|
| Revenue | $118.5 | $115.5; up 2.6% |
| Cost of product sales | $1.7 | $3.0 |
| Research and development | $69.1 | $128.9 |
| Selling, general and administrative | $101.2 | $96.7 |
| Loss from operations | $(53.6) | $(113.0) |
| Net loss | $(43.0) | $(113.1) |
| Basic and diluted loss per share | $(0.27) | $(0.70) |
| Net cash used in operating activities | $(17.9) | $(76.3) |
Approximate derived margins: product gross margin was 98.6% of sales; operating margin was (45.2%) and net margin was (36.3%). Higher average NUPLAZID net selling price primarily drove revenue growth. Sales allowances and accruals rose to $60.8 million from $36.6 million at year-end.
Financial position and liquidity
- At March 31, cash and cash equivalents were $290.9 million and available-for-sale investments were $112.0 million, totaling $402.9 million. Total cash, cash equivalents and restricted cash were $296.7 million.
- Total assets were $655.3 million; current assets were $502.9 million and current liabilities were $224.3 million. Accrued liabilities increased to $206.9 million from $112.9 million, including $69.6 million of accrued milestone and contingent payments.
- The filing lists no borrowings. Operating lease liabilities totaled $60.6 million, including $9.2 million current.
- Stockholders’ equity was $374.3 million, down from $400.4 million at year-end. Accumulated deficit was $2.4 billion.
- Investing activities provided $192.5 million, primarily reflecting net sales and maturities of investments. Financing activities provided $1.5 million.
Material changes and notable items
- R&D expense fell $59.7 million year over year, mainly because Q1 2022 included a $60 million upfront Stoke collaboration payment.
- SG&A rose $4.6 million, reflecting DAYBUE launch investment, partly offset by continued optimization of the NUPLAZID commercial franchise.
- Interest income, net, was $3.8 million versus $0.1 million. Other income included a $4.8 million gain on a strategic investment.
- Following DAYBUE’s March FDA approval, Acadia accrued a $40 million Neuren milestone, payable within 60 days after the first U.S. commercial sale. It also capitalized an estimated $29.6 million obligation to Neuren tied to the Rare Pediatric Disease Priority Review Voucher (PRV). The filing reports the PRV-related contingent payment as a Level 3 fair-value liability.
- Acadia sold all its commercial paper investments during the quarter, receiving $183.0 million and recognizing a $0.5 million realized loss.
Outlook, risks and contingencies
- Management expects existing cash, cash equivalents and investments to fund planned operations through and beyond the next 12 months, while noting that additional financing may be needed in the future. It expects net losses to continue for the next few years and does not provide numerical sales or earnings guidance in the supplied filing text.
- Management expects ADVANCE-2 enrollment to complete in 2023, with top-line results in early 2024; elsewhere the filing describes results as expected in the first half of 2024. R&D spending is expected to remain substantial, including for schizophrenia development, ACP-204, early-stage programs and NUPLAZID post-marketing work.
- Risks include uncertain DAYBUE uptake and reimbursement, NUPLAZID sales growth affected by lingering pandemic-related care patterns, clinical and regulatory uncertainty, reliance on third-party manufacturers, pricing and healthcare-policy changes, and macroeconomic and financing-market volatility.
- Patent litigation over NUPLAZID generics remained a contingency. Zydus settled, with specified generic launch dates subject to possible earlier-launch triggers; MSN remained an active defendant, with summary-judgment briefing scheduled to conclude June 28, 2023. A securities class action was in discovery. Management said it did not believe pending matters were likely to have a material adverse effect, but could not predict outcomes or estimate possible losses; no litigation-loss amounts were accrued apart from legal fees incurred.
- Management concluded disclosure controls and procedures were effective as of March 31, 2023, and reported no material change in internal control over financial reporting during the quarter.
Important facts for investors to verify
- DAYBUE launch performance, payer coverage, patient access and sales deductions after its April 2023 U.S. availability.
- NUPLAZID revenue trends, the level of sales allowances, and the impact of pandemic-related market conditions.
- Cash use and liquidity as commercialization and development spending evolve, including payment of the $40 million Neuren milestone and the PRV-linked obligation.
- ADVANCE-2 enrollment and result timing, and progress of ACP-204 and other pipeline programs.
- Developments in NUPLAZID patent litigation and the securities class action, including any changes to potential exposure or product exclusivity.