Acadia Pharma: Where Are the Insiders?
Jorge is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
This is the question I ask to myself every time I try to find insider activity in Acadia Pharmaceuticals (NASDAQ: ACAD). This biopharmaceutical company, which focuses on small molecule drugs that address unmet medical needs in neurological and related central nervous system disorders, has recently announced that it redesigned an ongoing late-stage study on its experimental anti-psychotic drug for Parkinson's Disease patients, and that it plans to conduct an identical study to win regulatory approval. The redesigned study about Pimavanserin will include only patients from North America, and will exclude mildly psychotic patients. Acordding to the company, results are expected to be published by the end of November.
Pimavanserin is small molecule that acts selectively as an antagonist/inverse agonist on serotonin 5-HT2A receptors. Serotonin is primarily found in the central nervous system (CNS) of humans. It is popularly thought to be a contributor to feelings of well-being and happiness. Serotonin has some cognitive functions, including memory and learning. Modulation of serotonin at synapses is thought to be a major action of several classes of pharmacological antidepressants.
There are many theories to define the causes of Parkinson's disease. Scientists are inclined to think that the destruction of dopamine is the main cause of Parkinson's disease, while others believe lack of serotonin may be the key. Currently, one of new treatments for Parkinson's disease is using stem cells. This experimental treatment can insert a graft of fetal stem cells that express dopamine into the striatum of the brain. However, Pimavanserin is a first-in-class treatment for Parkinson's disease psychosis that could regulate the optimal combination of dopamine (D2). Since Sept. 3 2009, Pimavanserin has not met expectations for Phase III clinical trials for the treatment of Parkinson's disease, and now Pimavanserin is presented with a new opportunity in 2012.
I hope Pimavanserin gets good results because my grandfather suffered from this disease for several years. But I think that the insiders of the company do not agree with me. The insider activity of Acadia Pharmaceuticals was reduced to an insignificant buy of 3,000 shares in the year 2009. This situation is a prime example of the little confidence that the management team has in the company, and in Pimavanserin.
If we look beyond Acadia Pharmaceuticals, we can find two companies whose management team totally trusts the company and its studies. These two companies are Celsion Corporation (NASDAQ: CLSN) and Catalyst Pharmaceutical Partners (NASDAQ: CPRX). Both have had a very high activity with insiders buys in 2012. On the one hand, Celsion Corporation, with a market cap of $213.22, has had insider buys valued at $176,167, or 47,120 shares in 2012. Currently, Celsion is developing its study in Phase III Thermodox. This treatment approach is designed to deliver high concentrations of anti-cancer drugs directly to those cancer cells that survive RFA. Celsion has a Special Protocol Assessment Guidance mentioned by U.S. FDA for its pivotal Phase III clinical trial program in the treatment of HCC.
On the other hand, Catalyst Pharmaceutical Partners, with $13.19 million in market capitalization, has had insider buys valued at $445,900, or 668,600 shares in 2012. Currently, Catalyst Pharmaceutical Partners and BioMarin Pharmaceutical entered into strategic collaboration for Firdapse in North America. Firdapse is an orphan product, which has been approved in the European Union and is undergoing a Phase III clinical trial in the United States, for the treatment of Lambert-Eaton Myasthenic Syndrome (LEMS), a rare, debilitating, and sometimes fatal autoimmune disease with the primary symptoms of muscle weakness. The data from the trial showed that CPP-109 did not meet the primary endpoint.
For these reasons, I am quite pessimistic about the results of Pimavanserin. I hope I am wrong for the sake of all of Acadia's shareholders, and all the people the company's drug would help.
TraderUsa owns shares of Catalyst Pharmaceutical Partners. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!