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Stock of San Diego biotech Acadia Pharmaceuticals has zoomed 19.39% this morning (Oct. 6) to $1.97. My advice: stay clear of this one. Acadia and its partner, Canada-based Biovail Corp., are conducting a third late-stage trial for pimavanserin, an experimental drug for psychosis related to Parkinson's disease. But this experimental drug failed in a similar test last month. In March of last year, the Securities and Exchange Commission sued Biovail and some of its former officers, stating that "present and former senior Biovail executives, obsessed with meeting quarterly and annual earnings guidance, repeatedly overstated earnings and hid losses in order to deceive investors and create the appearance of achieving earnings goals....Biovail actively misled investors and analysts about the reasons for the company's poor performance." The company settled for $10 million.
Stock of San Diego biotech Acadia Pharmaceuticals has zoomed 19.39% this morning (Oct. 6) to $1.97. My advice: stay clear of this one. Acadia and its partner, Canada-based Biovail Corp., are conducting a third late-stage trial for pimavanserin, an experimental drug for psychosis related to Parkinson's disease. But this experimental drug failed in a similar test last month. In March of last year, the Securities and Exchange Commission sued Biovail and some of its former officers, stating that "present and former senior Biovail executives, obsessed with meeting quarterly and annual earnings guidance, repeatedly overstated earnings and hid losses in order to deceive investors and create the appearance of achieving earnings goals....Biovail actively misled investors and analysts about the reasons for the company's poor performance." The company settled for $10 million.