ACADIA Pharmaceuticals(ACAD) - 2025 Q1 - Quarterly Report

Part I. Financial Information Financial Statements The unaudited condensed consolidated financial statements for Q1 2025 show increased revenues and net income, with a slight decrease in total assets Condensed Consolidated Statements of Operations (Unaudited) | Financial Metric | Three Months Ended March 31, 2025 (in thousands USD) | Three Months Ended March 31, 2024 (in thousands USD) | | :--- | :--- | :--- | | Product sales, net | $244,317 | $205,831 | | Total operating expenses | $225,027 | $190,621 | | Income from operations | $19,290 | $15,210 | | Net income | $18,987 | $16,555 | | Diluted EPS | $0.11 | $0.10 | Condensed Consolidated Balance Sheets (Unaudited) | Asset/Liability Metric | March 31, 2025 (in thousands USD) | December 31, 2024 (in thousands USD) | | :--- | :--- | :--- | | Cash and cash equivalents | $217,696 | $319,589 | | Total current assets | $870,942 | $938,318 | | Total assets | $1,132,364 | $1,187,756 | | Total current liabilities | $302,530 | $394,870 | | Total liabilities | $367,127 | $454,963 | | Total stockholders' equity | $765,237 | $732,793 | Net Product Sales Breakdown (Unaudited) | Product | Three Months Ended March 31, 2025 (in thousands USD) | Three Months Ended March 31, 2024 (in thousands USD) | | :--- | :--- | :--- | | NUPLAZID | $159,721 | $129,923 | | DAYBUE | $84,596 | $75,908 | | Total Product sales, net | $244,317 | $205,831 | Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses Q1 2025 financial performance, highlighting increased product sales, rising R&D and SG&A expenses, and sufficient liquidity Business Overview and Strategy The company's strategy focuses on its neuroscience and neuro-rare disease franchises, advancing pipeline candidates like ACP-101 and ACP-204 - The company's core franchises are Neuroscience (NUPLAZID) and Neuro-rare diseases (DAYBUE)[83] - Key pipeline candidates include ACP-101 for Prader-Willi syndrome (Phase 3 initiated Nov 2023) and ACP-204 for Alzheimer's disease psychosis (Phase 2 initiated Nov 2023)[85][86] Results of Operations Q1 2025 results show increased net product sales for NUPLAZID and DAYBUE, with higher R&D and SG&A expenses Comparison of Operating Results (USD millions) | Item | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Product Sales | $244.3 | $205.8 | +$38.5 | | - NUPLAZID | $159.7 | $129.9 | +$29.8 | | - DAYBUE | $84.6 | $75.9 | +$8.7 | | Cost of Product Sales | $20.4 | $23.0 | -$2.6 | | R&D Expenses | $78.3 | $59.7 | +$18.6 | | SG&A Expenses | $126.4 | $108.0 | +$18.4 | - The increase in R&D expenses was mainly due to increased costs from clinical-stage programs[107] - The increase in SG&A expenses was primarily driven by costs for the NUPLAZID consumer activation program and higher commercial operation expenses for the planned expansion of the DAYBUE team[108] Liquidity and Capital Resources The company's cash, cash equivalents, and investment securities decreased due to milestone payments, but liquidity remains sufficient for future operations - Cash, cash equivalents, and investment securities totaled $681.6 million at March 31, 2025, down from $756.0 million at December 31, 2024[119] - The decrease in cash was largely due to payments to Neuren, including a $50 million sales milestone and $48.8 million for one-third of PRV sale proceeds[119] - The company expects its current funds and anticipated product sales will be sufficient to fund planned operations through and beyond the next 12 months[109] Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate fluctuations on its investment portfolio, deemed immaterial by management - The primary market risk is interest rate risk from its portfolio of investment-grade, interest-bearing securities[124] - A hypothetical 10% change in interest rates on March 31, 2025, would not have had a material effect on the fair value of the investment portfolio[124] Controls and Procedures The company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal controls - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2025[126] - No changes in internal control over financial reporting occurred during the last fiscal quarter that have materially affected internal controls[127] Part II. Other Information Legal Proceedings The company faces ongoing patent infringement lawsuits for NUPLAZID and a securities class action, with potential losses currently inestimable - The company is engaged in ongoing patent infringement litigation against generic manufacturers (Aurobindo, Teva, MSN, Zydus) regarding NUPLAZID, with some cases settled[60][61][64] - An appeal by MSN in one patent case is scheduled for oral argument on June 6, 2025, and a decision is awaited in a separate case against MSN and Aurobindo[65][66] - The company is defending a securities class action lawsuit alleging violations related to its sNDA for pimavanserin, currently in expert discovery[68] - Due to litigation unpredictability, the company is unable to estimate possible losses and has not accrued amounts beyond incurred attorneys' fees[71] Risk Factors Key risks include product commercialization dependence, drug development uncertainty, regulatory hurdles, competition, IP protection, healthcare reform, and third-party reliance - The company's prospects are highly dependent on the successful commercialization of its two products, NUPLAZID and DAYBUE[134] - Drug development is a long, expensive, and unpredictable process with a high risk of failure[162] - The company faces risks from healthcare reform measures, such as the Inflation Reduction Act (IRA), which could negatively impact drug pricing and profitability[238][243] - The company relies on a limited network of third-party manufacturers (e.g., Patheon, Siegfried) and distributors, posing supply chain disruption risks[159][210] - The company faces significant litigation risk, including patent challenges from generic drug companies and securities class action lawsuits[219][296]