One of the single best stocks of the last five years went unnoticed for months…
But it would go on to produce gains of more than 4,800%.
In 2009, that very company – ACADIA Pharmaceuticals (ACAD) -- wasn’t considered anything special at all…
Except for the fact it truly was…
What many didn’t realize at the time was that this biopharmaceutical company -- that focuses on the development and commercialization of drugs that help address unmet medical needs, like Parkinson’s disease Psychosis (PDP) -- was about to change everything for patients suffering from the debilitating disease.
At the time, the only treatment options for those with PDP were dopamine antagonist drugs, like clozapine and quetiapine – which could make motor symptoms worse, accelerate cognitive decline, and increase the chances of stroke or even death.
That’s the last thing PDP-sufferers needed.
So when ACADIA found a way to treat PDP, patients and investors were excited.
Unfortunately, by September 2009, all seemed lost, as ACAD’s Phase III PDP trials with Pimavanserin (Nuplazid) failed to meet the primary endpoint of anti-psychotic efficacy.
By February 2010, the stock had plummeted 82% from $5.98 highs to $1.24.
While others ran, I saw value…
As earnings began to improve, I found ACAD to be fundamentally solid, with increasing earnings and selling near its 52-week low price.
I recommended the stock at $1.24 in February 2010… and again at $1.05 in the August 2010 issue of The Cheap Investor.
Around that time, ACAD initiated new Phase III studies on its PDP drug, which would go on to show successful top-line results, meeting primary endpoints by demonstrating highly significant anti-psychotic efficacy, as well as secondary endpoints for motoric tolerability by November 2012.
By the time ACAD reported those new Phase III results, the stock traded as high as $6.50 – a gain of 519% and 424% since we bought in…
However that was nothing.
The stock would go on to hit an all-time high of $51.99 before the FDA fast-tracked priority review of the drug with a PDUFA date of May 1, 2016.
It’s Not about the Price, But the Value Offered…
Even today, after an incredible 50% sell off on news of a $300 million stock offering, there’s still great value… and significant momentum.
That’s because of two upcoming, sizeable catalysts.
The FDA has set a target PDUFA date of May 1, 2016, but there’s also an advisory panel committee meeting to discuss the potential for approval set for March 29, 2016. The outcome of the panel meeting will give the Street a good idea of what’s to come.
But I can tell you with great certainty – approval of this drug could be a big game changer for the medical community.
While I’m not recommending the stock again at this extremely high price, I simply want to point out why we never overlook stocks that others are selling, or foolishly ignoring.
With patience, fundamentally sound stocks taken down on fear – like ACADIA -- will recover well… especially with such great catalysts. History proves that claim.
Tell me, would you have rather bought ACAD at $1.24 and $1.05, which produced gains of 4,092% and 4,852%, or when it was the hottest stock on the Street at $51.99?
Or even at its current price of $21.86?
I thought so…