ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) left its shareholders in euphoria after the San Diego-based company informed an advisory panel to the drug regulator has backed the company’s key drug Nuplazid.

Wins panel’s backing

The advisory panel to the U.S. Food and Drug Administration voted 12 to 2, supporting that the drug’s benefits are far higher than the risks associated with the treatment. It is to be noted that the company’s Nuplazid is aimed to treat psychosis related to Parkinson’s disease. The panel’s backing gave Acadia a big leap forward towards gaining the FDA’s nod. If everything falls into place from here forth then Nuplazid will become the first drug to be approved for Parkinson’s disease.

However, garnering such approval was not easy for the company, noted J.P. Morgan Chase & Co. analysts. The research firm’s Cory Kasimov said that winning the majority of votes would not have been a cake walk as it seems, however, the absence of any alternative treatment or medication worked in favor of the drug.

Black box labelling

Kasimov added that the recommendations or approval from the advisory panel does not put the FDA under any obligation to decide likewise. However, based on the past judgements, where the FDA has preferred to follow the panel’s recommendation, there are higher chances for Acadia to get the approval. The FDA is set to decide on the drug approval before May 1.

While the deadline is fast-approaching, the investors seek more information about the labelling requirements of the product. Leerink Partners analyst, Paul Matteis, said that the panel has directed the company to comply with post-marketing safety requirement. It is very likely that the product will have to follow black box warning, added Matteis. A black box warning usually highlights the potential side-effects that are associated with the drug.

On such developments, the stock of Acadia jumped by nearly 9.25% to $26.01.