Acadia shares tank after Parkinson's drug flunks Phase III

The placebo effect has scuttled the late-stage study of an experimental Parkinson's therapy being co-developed by Acadia Pharmaceuticals and Biovail, and the news immediately triggered a meltdown in Acadia's share price. Acadia stock plunged 70 percent this morning.

Researchers involved in the trial said that the data for pimavanserin reflected a marked improvement for patients taking the drug, but added that the trial failed to hit its primary endpoint after the placebo arm turned in an unexpectedly strong response. A secondary endpoint--for motoric tolerability--was achieved.

Shares of Acadia had been tracking ever higher for several months now, following a general rise in the biotech sector and building on high hopes for the new drug to treat psychosis linked to Parkinson's. This morning's meltdown shows once again that months of gains can disappear in an instant.

"We will thoroughly analyze these data along with the data on other secondary and exploratory endpoints over the next month to better understand the outcome of this study. Meanwhile we are continuing with the second Phase III PDP trial with pimavanserin." said Acadia CEO Uli Hacksell. Biovail CEO Bill Wells noted that these kinds of setbacks are a common occurrence in the development field, and he vowed to continue to build the company's pipeline.

- read the Acadia release
- check out the Reuters piece