Acadia Pharmaceuticals advances after Banc of America upgrades to neutral

NEW YORK, Jul 08, 2008 (Thomson Financial via COMTEX) -- ACAD | Quote | Chart | News | PowerRating -- Shares of Acadia Pharmaceuticals Inc. rallied Tuesday after the company was upgraded to neutral from sell at Banc of America Securities, which said the shares have fallen below its price target.

The firm currently has a $3.50 price target on the company. The stock closed Monday at $3.26, but rose 10% to $3.59 on Tuesday. The stock is down 76% over the past 52 weeks.

Despite the upgrade, Banc of America said it remained hesitant on the pharmaceutical company.

"With a lack of catalysts, balance sheet risk, and tough market conditions, Acadia's shares are unlikely to improve in the back half of 2008 and instead will likely decline with the cash position," it said.

The firm noted it wouldn't invest in Acadia for potential partnerships or buyouts, noting that it continues to believe a partnership for Pimavanserin is unlikely.

"It has been 10 months since management first guided to a Pimavanserin partnership and little has changed since then except Acadia's valuation," the firm said.

"We do submit that there will always be a possibility for a partnership given more time, or even a company buyout at Acadia's reduced valuation," it added.

Investing in Acadia for a partnership or buyout has been a losing strategy over the past twelve months, Banc of America elaborated. It urged investors to remain on the sidelines "until we see material improvements and progress in the company's clinical pipeline and partnership process." Ryan Vlastelica rv/vj

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