Acadia Pharmaceuticals led a biotech stock sell-off Wednesday after revenue from its Rett syndrome treatment missed expectations, leading the company to cut its full-year guidance.
Acadia's Daybue treatment is experiencing "launch growing pains," RBC Capital Markets analyst Gregory Renza said in a report. Sales came in at $85 million, missing the average forecast for $90 million, "which most investors considered too high," Leerink Partners analyst Marc Goodman said in a report.
The company noted fewer than expected patients started treatment with Daybue in the second quarter. Rett syndrome is a rare genetic disease that affects the nervous system. As a result, Acadia Pharmaceuticals now expects full-year sales of $340 million to $370 million from Daybue, down $40 million at the midpoint from its prior guidance.
"Some investors may be disappointed by the lower Daybue sales guidance, but the new numbers appear credible given the lower discontinuations and improved new patient starts, and the stock was already discounting lower numbers," RBC's Goodman said.
Acadia stock skidded more than 19.5%, closing at 15.17. Acadia stock took the biggest hit among stocks trading above 10 per share in Investor's Business Daily's Medical-Biomed/Biotech industry group.
But Acadia stock wasn't alone in its dive. Shares of Madrigal Pharmaceuticals and Intra-Cellular Therapies also slumped despite better-than-expected second-quarter sales. Overall, the industry group of 730 companies fell 2.6%.
Madrigal Follows Acadia Pharmaceuticals Stock
Unlike Acadia Pharmaceuticals, Madrigal beat expectations in the highly anticipated first quarter of sales from its metabolic dysfunction-associated steatohepatitis drug, Rezdiffra. Rezdiffra is the first treatment for the disease also known as MASH, formerly NASH.
Rezdiffra blew away expectations at $14.6 million in June-quarter sales. Analysts' calls ranged from $3.8 million to $5.4 million, Leerink Partners analyst Thomas Smith said in a client note.
"Overall, we view the headline revenue number for Rezdiffra as a positive, exceeding initial launch quarter sell-side and buy-side expectations," he said.
But it will be important to understand how much of those sales stem from treating patients vs. drug stocking, he added. Smith has an outperform rating on Madrigal stock. Similarly, Leerink's Goodman rates Acadia Pharmaceuticals stock an outperform.
Intra-Cellular Delivers 'High-Quality' Beat
Likewise, Intra-Cellular delivered a "high-quality" second-quarter report, Mizuho Securities analyst Graig Suvannavejh said in a report. The company came up with $161.3 million in sales of its only drug, Caplyta. Caplyta treats depression in patients with bipolar disorder.
Caplyta sales beat expectations by about 2%, Needham analyst Ami Fadia said in a report. She has a buy rating and 100 price target on the biotech stock.
Intra-Cellular raised its sales outlook for the year by $5 million at the midpoint and now expects $650 million to $680 million. Fadia noted Intra-Cellular is working to expand approvals for Caplyta to include major depressive disorder, one of the most common forms of depression.
"Overall, it is good to see Caplyta continue to perform well, but this is well understood and we would expect Intra-Cellular to trade flat at best on the updated guidance," she said.
Moving Averages Under Pressure
Acadia Pharmaceuticals shares undercut their 50-day moving average on the company's second-quarter report. Meanwhile, MarketSurge shows Madrigal stock fell to its 200-day line, and Intra-Cellular shares bounced off their 50-day line. The latter is forming a cup-with-handle base with a buy point at 82.
Acadia stock is the lowest rated of the three with a Relative Strength Rating of 22 compared with Madrigal's and Intra-Cellular's 96 and 89, respectively. The RS Rating is a 1-99 measure of a stock's 12-month performance, according to IBD Digital.
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