Moving into massive markets
Todd Campbell: Acadia Pharmaceuticals (NASDAQ:ACAD) recently launched its first and only commercial drug, Nuplazid, and the company's third-quarter earnings will give investors their first detailed look at whether or not it's winning traction among doctors as a treatment for hallucinations and delusions in Parkinson's disease patients.
Parkinson's disease psychosis, or PDP, affects about 40% of the 1 million patients with Parkinson's disease, and until now doctors had no other option than to prescribe antipsychotics off-label that can interfere with other Parkinson's medications. Because Nuplazid controls PDP symptoms without that drawback, it could be a top-seller.
If Q3 results show Nuplazid sales are ramping up quickly, then Acadia's stock could enjoy tailwinds in Q4, but an even bigger market-moving event may be the company's upcoming release of data from a trial evaluating Nuplazid in Alzheimer's disease psychosis.
If those results, which are expected prior to year's end, show that Nuplazid works for those with Alzheimer's disease, then they could clear the way for Nuplazid's use by another population of more than 1 million people. At least 25% of the 5 million Americans with Alzheimer's disease suffer from hallucinations and delusions.
Admittedly, there's no guarantee that doctors will flock to Nuplazid, nor that Acadia Pharmaceuticals' Alzheimer's disease trial will pan out. Nevertheless, the potential upside makes me think this is a stock worth buying in October.
I see a bright future
Brian Feroldi: Developed countries around the world are aging, which should keep the demand for drugs that treat vision loss on the rise. One clinical-stage biotech that looks well positioned to benefit from the trend is Ophthotech (NASDAQ:OPHT).
Ophthotech's lead product candidate is called Fovista. This drug is being studied as an add-on therapy to other top-selling eye disease drugs such as Novartis' Lucentis, Regeneron's Eylea, and Roche's Avastin.
In a phase 2B trial, Ophthotech showed that using Fovista in combination with Lucentis led to a gain of 10.6 letters from baseline on a standardized vision test. That was substantially ahead of the 6.5-letter gain that patients who only used Lucentis experienced. Those results were so good that Novartis decided to ink a $1 billion deal to secure the international rights to Fovista, which speaks volumes about the drug's long-term sales potential.
Ophthotech is set to report data from its phase 3 trial of Fovista in combination with Lucentis in the fourth quarter. Investors should get a read-out from another trial using Fovista with Eylea or Avastin in early 2017. If the data from those trials reaffirms Fovista's clinical benefits, then it should be in regulators' hands soon after.
All in all, Fovista holds promise to become part of a standard-of-care combination therapy in a growing, multibillion-dollar market. There are plenty of risks here, but the upside is so large that I think Ophthotech is a stock that risk-tolerant investors could learn to love.
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