NEW YORK (TheStreet) -- Acadia Pharmaceuticals (ACAD) - Get ACADIA Pharmaceuticals Inc. Report shares are down $21.08% to $35.33 in trading on Thursday after the company announced that it would not seek regulatory approval for its Parkinson's disease psychosis treatment nuplazid until the second half of this year.
The company said that the delayed application was due to the need for the company to make sure that it could support the production and distribution of the treatment in case it was approved by regulators.
That information was released at the same time the company said that its longtime CEO Uli Hacksell would be resigning from his post effective immediately. Hacksell will be replaced by current Executive VP and CFO Stephen Davis on an interim basis.
"Steve's strong operational experience and demonstrated leadership skills will be important as ACADIA moves NUPLAZID towards registration and prepares for the planned launch of NUPLAZID in the United States," said Leslie L. Iversen, Ph.D., the chairperson of the company's board.
TheStreet Ratings team rates ACADIA PHARMACEUTICALS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate ACADIA PHARMACEUTICALS INC (ACAD) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ACADIA PHARMACEUTICALS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, ACADIA PHARMACEUTICALS INC reported poor results of -$0.94 versus -$0.44 in the prior year. For the next year, the market is expecting a contraction of 2.1% in earnings (-$0.96 versus -$0.94).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has significantly decreased by 135.4% when compared to the same quarter one year ago, falling from -$12.05 million to -$28.37 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Biotechnology industry and the overall market, ACADIA PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Compared to its closing price of one year ago, ACAD's share price has jumped by 37.51%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in ACAD do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- Despite its growing revenue, the company underperformed as compared with the industry average of 35.5%. Since the same quarter one year prior, revenues rose by 29.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- You can view the full analysis from the report here: ACAD Ratings Report