Acadia Pharmaceuticals shares dropped 22 percent yesterday after U.S. Food and Drug Administration (FDA) commissioner Scott Gottlieb told Congress the agency would investigate the company’s Nuplazid. The drug is used to treat hallucinations and psychosis related to Parkinson’s disease.

Nuplazid launched June 2016. The drug was not without its safety concerns during the approval process, but the agency concluded that its health benefit outweighed the risks. Per a CNN articleearlier this month, "But the physician who led the FDA’s medical review, Dr. Paul Andreason,warned that patients taking the drug during the company’s clinical trials experienced serious outcomes, including death, at more than double the rate of those taking the placebo. The company’s limited testing, he said, had not convinced him that the benefits outweighed the risks."

Even the drug’s efficacy was called into question, although the overall arguments presented by the advisory committee to the FDA seemed to be along the lines of: it’s not great, but it’s the only thing available, so we’ll recommend it. One physician on the panel was quoted in the hearing as saying, "I guess I’m hoping that the risks are going to be small, and I think the benefits for some of these people who are very sick and whose families are affected by this, I think they’re probably willing to take that risk."

A nonprofit healthcare organization, the Institute for Safe Medication Practices, noted in November 2017 that between the drug’s launch in June 2016 and March 2017, there had been 244 deaths reported to the FDA. It also pointed out that there were hundreds of reports saying Nuplazid was "not providing the expected benefit" or was possibly making it worse.

Since then, FDA data indicates that the number of deaths has risen to more than 700. It’s important to note that this is generally an aging and sick population with a serious disease. However, as of June 2017, according to FDA data, Nuplazid was the only "suspect" medication mentioned in at least 500 of the deaths.

"This is almost unheard of, to have this many deaths reported," Diana Zuckerman, founder and president of the nonprofit think tank the National Center for Health Research told CNN. "You just don’t see this with most new drugs—you don’t see all these reports—so you have to take it seriously."

Last week, during a budget hearing with Congress, Gottlieb was asked about Nuplazid. He promised at the time that he would "take another look." Then it was later reported that the FDA had already started conducting a new evaluation of Nuplazid.

On April 10, Acadia released a statement about the drug’s efficacy and safety, citing, "The clinical development program for Nuplazid involved 25 clinical studies in greater than 1,200 patients, comprising over 600 PDP patients (with approximately 170 patients treated for at least two years), thus presenting the largest clinical safety database in PDP patients to date. We continually analyze new data to ensure the safety of Nuplazid and the ongoing evaluation has revealed no change in the benefit/risk profile described in the Nuplazid Prescribing Information."

Brian Feroldi, with The Motley Fool, writes, "The best-case scenario is that the FDA takes another look at the drug and does nothing. The worst case is that they determine that the benefits of using Nuplazid do not outweigh the risks and they decide to pull the drug from the market. If that happens, then the bull case for owning Acadia will be obliterated. Which way the agency is going to lean at this point is anyone’s guess."

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