Word from the FDA that Acadia Pharmaceuticals Inc. will not need another Phase III trial in order to ask for approval of the oral tablet pimavanserin for Parkinson's disease psychosis (PDP) moved the likely launch date up about nine months, analysts estimated, and made at least some investors more sanguine about the chances for market clearance in Alzheimer's disease psychosis (ADP).

San Diego-based Acadia's shares (NASDAQ:ACAD) roared upward on the news, closing Thursday at $13.10, up $5.13, or 64.4 percent.

Alan Carr, analyst with Needham & Co., called the decision by U.S. regulators surprising, and wrote in a research report that his firm "view[s] this development as another indicator of increasing flexibility at the FDA as well as recognition of the strength of the Study 020 data in PDP." Shaving about nine months off the development timeline puts approval by the FDA in late 2015, Carr wrote.

An inverse agonist of serotonin 5-HT2A, the compound has undergone a Phase III study designated 020, and Acadia was readying a confirmatory trial that will not happen now, said CEO Uli Hacksell during a conference call with investors. The company will not submit the new drug application until near the end of 2014, a wait that caused some chagrin among interrogators.

"We have a number of things remaining that need to be done," Hacksell said, such as drug-drug interaction studies and work related to chemistry, manufacturing and controls. "These things take time, and we still save a lot of time compared to the previous scenario," he said.

Roger Mills, vice president of development, said the drug-drug studies already are under way. "That was part of the original planning. I think it's also fair to say that they're very standard studies," he said. "They're what we expected to do, planned to do and will do."

Mills noted that the company has gained "experience with not only the drug for its effects, but also in manufacturing multiple lots for our clinical trials," so Acadia is "very comfortable with the chemical characteristics of the drug." Officials are "not anticipating any problems in the program, but we want to make sure that it's done smoothly," he said.

Regulators in the European Union "do allow a single-study approval similar to the U.S.," so the options overseas will be explored as well, Mills said. Although pimavanserin does not yet have expedited review status, he said, Acadia is "considering the various processes [for a speedier path] as we move forward." The firm expects a normal review, otherwise.

"This is a new indication for FDA, and the standard approach would be to go to an advisory committee," Mills said.

Mills said Acadia's approach to the agency with the pimavanserin package contains lessons for the company and others. "I think what won them over was not only the compelling clinical data from 020 with the very significant statistical improvements seen, and the consistency of the data across multiple endpoints," but also the "safety data from the program in total," he said.

"I think one of the very interesting and clear aspects of this program is that the design of 020 is based on our experience in previous studies, and the signals we were able to see there," Mills said. "That is something we shouldn't forget in these data. They're not just positive," but were able to become so because Acadia designed the Phase III study in such a way that would "restrain the placebo response, allowing the drug to show that it has a very clear benefit in these patients," he said.

Regulators are "as frustrated as many in the industry are about the placebo responses we see, especially in the neuropsychiatry field. The steps that we took to manage the placebo response were well received, encouraged and supported by the FDA," Mills said.

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The study, at "just over 50 sites," showed widely distributed efficacy, Mills said. "Was there any site that was a driver of the results? The answer is no," he said.

Thomas Aasen, Acadia's chief financial officer, said the latest news from the FDA "doesn't, in itself, change our thoughts on commercialization," though "when it comes to specific spending, I'd like to defer to future quarters" for a fuller report. Pimavanserin, though, is "the ideal kind of drug that can serve as the great foundation" for label expansion later.

This expansion could include ADP, and Hacksell said the firm is planning a proof-of-concept Phase II trial, which will start in the second half of this year. ADP is an indication "where we want to move as quickly as possible," Hacksell said.

Piper Jaffray analyst Charles Duncan wrote in a research report that pimavanserin may not only "become the 'go to' drug" in PDP, but has a shot at the larger ADP market. "We are now including a placemarker value for ADP, based on a projected launch in ADP in 2017 and peak penetration of 24 percent in similar patient demographics as we use for PDP, but with a likely conservative market size twofold larger than that for PDP," Duncan wrote. Acadia estimated an ADP patient population that is four times to six times larger than PDP, he added.

Duncan, though, did not see success in PDP as ensuring a win in getting the ADP label. "We apply a 70 percent probability of success to the APD valuation, lower than the probabilities that we employ in PDP, due to differences that we believe exist in the symptoms of ADP vs. PDP and thus the clinical risk to the program," Duncan wrote.

Acadia's Phase III success with 020 came after two failures, and showed highly significant antipsychotic efficacy as measured using the nine-item SAPS-PD scale (p = 0.001). Well tolerated, the drug also met the secondary goal: motoric tolerability, as measured using Parts II and III of the Unified Parkinson's Disease Rating Scale. Acadia recorded a highly significant improvement in the secondary efficacy measure, too – the Clinical Global Impression Improvement, or CGI-I, scale (p = 0.001). (See BioWorld Today, Nov. 28, 2012.)