ACADIA Pharmaceuticals (NASDAQ:ACAD) fell for a fifth consecutive day on Thursday, shedding 12.78 percent to close at $22.18 apiece, after earning a sell recommendation from Goldman Sachs.
In its market note, the investment firm reiterated its sell recommendation and $17 price target on the stock after missing its primary endpoint in its phase 2 study of 5-HT2A inverse agonist remlifanserin for the treatment of hallucinations and delusions in patients with Alzheimer’s disease psychosis. The price target marked a 23 percent discount from its latest closing price.
The clinical study will still progress to its third phase, but the company will be inclined to remove the 30 mg dosage arm due to the lack of improvement in its efficacy during the recently concluded trial.
Photo by Tima Miroshnichenko on Pexels
ACADIA Pharmaceuticals said that it plans to present detailed safety and efficacy results from the Phase 2 study in an oral presentation at the upcoming Clinical Trials on Alzheimer’s Disease (CTAD) conference in Boston on November 16 to 19, 2026.
Additionally, remlifanserin is currently being investigated in an additional Phase 2 study to evaluate its efficacy, safety, and tolerability for the treatment of Lewy body dementia psychosis.
Citi, BMO Capital Maintain Positive Ratings
In contrast, Citigroup maintained its buy recommendation on the stock, albeit it lowered its price target to $33 from $40 previously. The reduction was also triggered by the missed primary endpoint.
For its part, BMO Capital slashed its price target for the firm to $34 while maintaining an outperform rating, also amid expectations for the drug candidate’s reduced probability of success to just 35 percent from 40 percent prior.
BMO Capital noted that the phase 2 study trial miss represents a near-term headwind for ACADIA Pharmaceuticals, although it noted that clear response, consistency of SAPS-H+D improvements over time, and stronger efficacy in higher psychosis burden patients all suggest that the treatment candidate is therapeutically active in Alzheimer’s disease psychosis.
The firm said remlifanserin retains potential to show success in both Alzheimer’s disease psychosis and Lewy body dementia psychosis.
Strong Hedge Fund Conviction
In terms of institutional sentiment, ACADIA Pharmaceuticals earned a strong backing from hedge fund holders, as evidenced by the jump in their committed capital, even as one fund exited its position.
Data from Insider Monkey showed that 38 hedge funds held positions in the stock in the second quarter of the year, down from 39 in the quarter previously.
However, the existing investors’ combined holdings increased by 13.67 percent to $1.58 billion from $1.39 billion quarter-on-quarter.
As the data predate phase 2 trial results, updated hedge fund holdings in the third quarter of the year will offer critical insight on whether the high-conviction buying trend persisted.
READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy.
