ACADIA Pharmaceuticals Inc. — Q1 2022 10-Q
Business context and reporting period
Quarter ended March 31, 2022. Acadia is a CNS-focused biopharmaceutical company; NUPLAZID (pimavanserin) for Parkinson’s disease psychosis (PDP) was its only marketed product. Financial statements are unaudited.
Financial results and liquidity
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Net product revenue | $115.5 million | $106.6 million; up 8.4% |
| Cost of product sales | $3.0 million | $2.2 million |
| Gross margin | Approximately 97.4% | Approximately 98.0% |
| Research and development | $128.9 million | $57.0 million |
| Selling, general and administrative | $96.7 million | $111.7 million |
| Operating loss | $113.0 million | $66.8 million |
| Net loss / diluted loss per share | $113.1 million / $0.70 | $66.4 million / $0.42 |
| Operating cash flow | -$76.3 million | -$60.1 million |
| Cash, cash equivalents and investments | $446.0 million at March 31 | $520.7 million at December 31, 2021 |
Revenue growth primarily reflected a higher average net selling price. R&D increased mainly because of a $60 million Stoke upfront payment, expensed in the quarter, and higher program spending. SG&A declined mainly on lower advertising, promotional and personnel costs. Management said available cash and investments should fund planned operations for at least 12 months, while noting potential need for significant future financing. No debt balance is reported; operating lease liabilities totaled $64.4 million.
Developments, outlook and risks
- Acadia resubmitted the NUPLAZID supplemental application for Alzheimer’s disease psychosis (ADP); FDA action was targeted for August 4, 2022, with an advisory committee meeting scheduled for June 17, 2022.
- Following positive Phase 3 LAVENDER results, the company expected to submit a trofinetide NDA for Rett syndrome around mid-2022. These were plans, not approvals.
- In April 2022, after the reporting period, ACP-044’s acute postoperative pain study missed its primary endpoint; next steps were under analysis.
- Management expects continuing operating losses and substantial R&D spending. COVID-19 continued to weigh on NUPLAZID sales growth through reduced patient visits, long-term-care occupancy and healthcare-provider access. The filing also cites possible trial disruption from Russia’s invasion of Ukraine.
- Generic-drug patent litigation concerning NUPLAZID remained ongoing; a joint trial was scheduled for May 2023. A separate securities class action was pending, and management could not estimate potential losses; no litigation accrual was recorded beyond incurred legal fees. Management did not expect pending matters to have a material adverse effect, but outcomes are uncertain.
- Potential milestone payments under collaboration and license agreements were up to $3.1 billion in aggregate. The Stoke agreement alone included up to $907.5 million in potential milestones, plus royalties; these are contingent, not current debt.
- Disclosure controls were assessed as effective at March 31, 2022, and no material change in internal control over financial reporting was identified during the quarter.
Investor verification priorities
- Track FDA review and advisory committee outcomes for the ADP application, and the timing and regulatory progress of the trofinetide NDA.
- Assess whether NUPLAZID revenue growth reflects durable demand and pricing, including recovery from pandemic-related access constraints and changes in sales allowances.
- Monitor cash burn, the decline in liquid resources, pipeline spending and any financing needs.
- Follow NUPLAZID generic patent litigation, the securities class action, and potential contingent collaboration payments.
- Review the implications of the ACP-044 trial failure and management’s stated next steps.