ACADIA Pharmaceuticals Stock Soars Over 12% After EU Regulators Reverse Course on Rett Syndrome Drug

Shares of ACADIA Pharmaceuticals surged Friday, climbing 12.65%, or $3.00, to $26.72 in midday trading, after European regulators reversed an earlier rejection of the company's flagship Rett syndrome treatment.

The rally marks a dramatic turnaround for a stock that had been weighed down for months by uncertainty over whether the drug, trofinetide, would ever reach patients in the European Union.

A reversal months in the making

The catalyst behind Friday's jump traces directly to a regulatory decision delivered this week. According to meeting highlights published by the European Medicines Agency, the Committee for Medicinal Products for Human Use, following a re-examination, recommended granting a marketing authorization for Daybu, the European brand name for trofinetide, for the treatment of neurobehavioral symptoms of Rett syndrome in adults and pediatric patients aged five years and older.

The decision reverses a setback that had clouded ACADIA's European ambitions since early this year. The committee had initially adopted a negative opinion on the drug's marketing authorization application in March 2026, prompting the company to formally request a re-examination of that decision.

What went wrong the first time

When the CHMP first rejected the application, the committee's concerns centered on specific gaps in the clinical data rather than a wholesale dismissal of the drug's effectiveness. The committee's refusal was based on perceived deficits including the view that the treatment effect observed with trofinetide after 12 weeks, while measurable, was limited in magnitude; that the pivotal study did not capture all core symptoms of Rett syndrome; and that assessment of longer-term outcomes was influenced by patient discontinuations over time — even though the pivotal LAVENDER trial had successfully met its co-primary and key secondary endpoints.

ACADIA's chief executive responded to that initial setback by emphasizing the company's confidence in the underlying clinical data. "While we are disappointed by the CHMP's recommendation to refuse approval, we continue to be encouraged by the meaningful benefits trofinetide has demonstrated for people living with Rett syndrome," Catherine Owen Adams, ACADIA's Chief Executive Officer, said at the time. "The strong engagement and positive feedback we have seen from patients, caregivers, and clinicians in the Rett community reinforce our belief in the treatment's clinical value."

A drug already approved elsewhere

Trofinetide's path through European regulators stands in contrast to its reception in other major markets, where the drug has already secured approval and reached patients. The medicine, a synthetic version of a naturally occurring molecule known as the tripeptide glycine-proline-glutamate, was approved for the treatment of Rett syndrome in adults and pediatric patients two years of age and older by the U.S. Food and Drug Administration in March 2023 under the trade name DAYBUE, and the drug is also approved in Canada and Israel.

In the U.S., ACADIA has continued expanding the franchise around the drug even as the European process played out. The company's newer formulation, DAYBUE STIX, a dye- and preservative-free powder version of trofinetide, became broadly available across the United States earlier this year following a limited initial launch.

A business built on two approved drugs

Beyond trofinetide, ACADIA's commercial business rests on a second approved medicine targeting a different neurological condition. The company also markets NUPLAZID, a selective serotonin inverse agonist and antagonist used to treat hallucinations and delusions associated with Parkinson's disease psychosis.

Both franchises have continued growing steadily even amid the European regulatory uncertainty. In the company's first quarter of 2026, total revenues reached $268 million, up 11% year-over-year, with DAYBUE sales climbing 20% to $101 million and NUPLAZID sales rising 6% on a non-GAAP adjusted basis to $167 million. Management reaffirmed its full-year 2026 revenue guidance of $1.22 billion to $1.28 billion alongside those results, while reporting a robust balance sheet position of roughly $850 million in cash and no long-term debt.

A pipeline with more catalysts ahead

Friday's regulatory win adds to a list of upcoming events that could further move the stock in the coming months. ACADIA has reaffirmed its expectation for topline results from a Phase 2 study of remlifanserin, an experimental treatment for Alzheimer's disease psychosis, with results anticipated sometime between August and October of 2026. The company is also awaiting topline results from a trofinetide clinical trial underway in Japan, expected in the September-to-November window.

Not every recent pipeline update has gone ACADIA's way, however. The company's investigational treatment for hyperphagia in Prader-Willi syndrome, an intranasal formulation known as ACP-101, missed all of its endpoints in a Phase III trial, leading the company to end its development work on that program.

Wall Street's view heading into the news

Even before Friday's regulatory reversal, analysts following the stock had largely maintained an optimistic outlook on ACADIA's prospects. Across 21 analysts tracking the stock, the average rating has stood at "Buy," with a 12-month price target of $31.65 implying a sizable increase from recent trading levels heading into this week. Recent analyst commentary had also pointed to the stock potentially being undervalued following the company's reaffirmed guidance, even before factoring in the European approval news.

Not all recent analyst moves had been positive, however. RBC Capital lowered its price target on ACADIA to $29 from $30 in May, while Citi separately trimmed its target to $32 from $33, even as both firms maintained bullish ratings on the stock.

What the European approval means going forward

While the CHMP's recommendation represents a significant step, it is not the final word on the drug's fate in the European market. A positive CHMP opinion typically precedes a formal decision by the European Commission, which generally follows the committee's recommendation in granting marketing authorization across the European Union. If that authorization follows as expected, it would open the door for ACADIA to bring trofinetide to Rett syndrome patients across the European market for the first time, expanding the drug's commercial reach well beyond the United States, Canada and Israel.

For a company whose stock has spent much of the year trading within a relatively narrow band between roughly $20 and $28, Friday's regulatory reversal — and the sharp rally that followed it — offers a concrete sign that one of its more uncertain near-term catalysts has finally been resolved in the company's favor.