|Written by GSCR Staff|
|Tuesday, 16 July 2013 00:15|
In Monday’s The Goldman Guide we talked about ugly duckling stocks. The featured stock today has been a beauty queen over the last year. ACADIA Pharmaceuticals (NASDAQ – ACAD - $20.28) is up nearly 1200% over the last year, and jumped almost 9% during yesterday’s run.
Is the run over? From a technical standpoint, the answer is no, as the charts are bullish to very bullish in the short and intermediate time frame. Most estimates have the company losing money next year and actually bringing in less revenue. The stock is going up on the potential that the company has some serious game changers in the pipeline that could hit the market in 2015.
One major premise to consider before a decision can be made on buying ACAD is that that the population of the industrialized world is aging, a trend that will continue until at least 2050 from all accounts. Therefore, the ailments and diseases that affect this group, or the 65 and older demographic, will drive a major market opportunity for several years. Innovations in healthcare will help this group enjoy a higher standard of living, and will also present a major opportunity for profit.
ACADIA has 5 platforms in the pipeline, including Pimavanserin, a drug developed on the company’s proprietary and patented R-SAT platform. This is the first drug that will enter the market, probably sometime in 2015, which selectively blocks the 5-HT2A serotonin receptor. The drug will target Alzheimer’s disease and Parkinson’s disease psychosis (ADP and PDP respectively), as well as offer a symptom free treatment for schizophrenia. As of right now, there are no drugs or treatments that target ADP and PDP. If these drugs are approved and reach the market the company could easily reach the $2 billion sales mark. A price target of $25 is definitely achievable.
I featured this stock in an article for Seeking Alpha that was released yesterday morning. Here is the link below for those who are interested in reading further.
Have a great day.
Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.
This Market Monitor blog was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research, which typically highlights small cap companies, and Goldman Opportunity Research, which features micro cap companies in a sponsored research format. Thus, the Select product reflects the Firm’s internally generated stock ideas while the Opportunity product reflects sponsored research reports.
It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this blog, newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations.
The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research blog, report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.
This blog does not take into account the investment objectives, financial situation, or particular needs of any particular person. This blog does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA or with any state securities regulatory authority.
ALL INFORMATION IN THIS BLOG, REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.
For more information, visit our Disclaimer: www.goldmanresearch.com