What happened
Shares of Acadia Pharmaceuticals (ACAD -2.42%), a commercial-stage central nervous system drug specialist, were down by 16.5% on heavy volume as of 10:33 a.m. ET Thursday morning. To put this double-digit move lower into content, the S&P 500, as well as the iShares Biotechnology ETF, were both trading sideways at the time of this writing.
What's driving Acadia Pharmaceuticals' stock lower today? As the company hasn't released any major news in the last week, this abrupt sell-off is a bit of a mystery.
So what
Acadia Pharmaceuticals stock has a long history of being one of the more volatile equities within the small to mid-cap biotech landscape. The company's Food and Drug Administration (FDA) approved treatment for Parkinson's disease psychosis, Nuplazid, has frequently been a source of both encouraging and concerning news. For example, the drug's sales have grown at a healthy clip since launch.
Nuplazid, for instance, hauled in an impressive $142 million in the second quarter of 2023. However, safety issues have also sparked short attacks against the company's shares in the past. That being said, unless there is a pending news event that somehow got leaked early, Nuplazid's safety profile doesn't appear to be driving this latest downturn in the biotech's stock price.
Now what
Is Acadia Pharmaceuticals stock a buy on this pullback? Fundamentally speaking, the biotech's shares screen as an incredible bargain after this dip. The company sports two high-value medicines in Nuplazid and Daybue (for Rett syndrome), a strong balance sheet with $375 million in cash, cash equivalents, and investments, and a robust pipeline chock full of potential value drivers. All that being said, it would be nice to know what's actually behind this sell-off before buying shares. In other words, bargain hunters may want to take a cautious approach to this mid-cap biotech stock until the dust settles.
