Acadia presented at the Morgan Stanley conference early this morning. Company still currently tracking at metrics to achieve just below the mid-point of their 2024 guidance range and see more upside than downside to the guidance. Prescriber base is growing and Acadia is now focused on increasing penetration in the high volume institutions that see ~60% of the current 5,000 diagnosed patients. Rate of new patient starts is stabilising and they hope discontinuation rates will moderate further.
All in all encouraging to see their continued belief in the longer term success of Daybue in US, with the company also calling out the near-term progress on the Ex-US front which they see as a very attractive opportunity despite price differences etc. Key highlights regarding Daybue for us were as below: 750 prescribers now for daybue (up from 700 that they mentioned last month)More steady cadence now of new patient starts vs. the bolus they saw early on and in-line with their expectations prior to launch.
They see more upside than downside to this years guidance. Re-iterated that the way they are tracking now its just below mid-point of the 2024 guidance. Things will have to deteriorate for them to hit the low point. Said COE’s account for one-third of prescriptions, but are only 50% penetrated so still patients to come from those (COEs treat roughly 25% of the 5000 diagnosed patients).
Their focus now is on the high volume institutions (they treat 60% of the diagnosed patients) and account or currently one-third of prescriptions, These are less familiar with the drug and Acadia is focusing on using their real world LOTUS study data, case study publications from COEs physicians, encouraging peer to peer discussions etc. to educate them to try and bring them to COE level of knowledge and familiarity with the drug.
Company said they are still tracking in terms of penetration ahead of their expectations at launch and also ahead of the average penetration by around 16 months of launch of other rare disease analogues.They also said they expect discontinuations to moderate further and they could potentially improve on the 50% long term persistency that they have currently guided too.
There is still quite a bit of variability in how physicians treat Daybue 16 months in launch and they are trying to facilitate this evolving into a best practice and as quickly as they can which will help then for them to potentially improve on the 50% persistence rate.There was talk on Ex-US progress of Daybue as well. Acadia said they view Ex-US opportunity very attractively. Canada (expecting approval decision by end of CY24), Expect in 1QCY25 EU application (decision within a year), Japan some clinical work to be done but good initial discussions.
Our view on Daybue’s growth drivers is unchanged – namely a growing rett diagnosed population of which 70% are yet to try Daybue, lack of near-term competition and stabilising persistency levels tracking to >50% longer-term target, which Acadia thinks they can improve on. Company so far says they are tracking just below mid-point of their 2024 guidance range (US$340-370m)which bodes well for 3Q daybue sales both showing increased net patient adds as well as QoQ growth in revenues.
To meet the low point of the guidance range they need to deliver US$90m of revenue for each of the two remaining quarters. We currently expect US$90.1m for 3Q Daybue sales and now see upside to that estimate. Acadia will likely report their 3Q earnings in Nov’24. Canada approval for Daybue is also expected in 4QCY24. On a separate note,
We flag that the Priority Review Voucher program is expected to come to an end by 30th September 2024 unless re-authorised by Congress (we will know this month). If this act id not re-authorised by congress, we are of the view that the value of vouchers would go up. There is a possibility that companies with vouchers (including Acadia) may be holding off on monetising the voucher ahead of this decision.
This may explain why Ipsen managed to sell its PRV for US$158m last week (much higher than the US$100-$110m range the vouchers were selling for prior to this.NEU stands to get one third of the value of the PRV should Acadia decide to sell it and therefore the value of these vouchers going over the US$100m rate we have currently assumed represents an upside for NEU.
NEU is also meeting with the FDA this month to discuss Phase 3 design for NNZ-2591, which we continue to see as key value driver for NEU and which we believe is not reflected in current share price.
Key Dates Ahead
sep 24- Potential re-authorisation of PRV program (could lead to value of PRVs going up if not re-authorised)
Oct’24 – Update on NNZ-2591 development plans following Sep’24 FDA meeting on Phase 3 Phelan Mc-Dermid (PMS) Trial design.
(20min delay)