Dive Insight:

While the FDA has agreed to take another look at Acadia’s application, approval of the expanded use is still an uncertain prospect. After the initial rejection, analysts expected the company to have to run another clinical trial.

“In our view, the FDA has already showed their cards,” Raymond James analyst Danielle Brill wrote in a note to investors. Without new data, it’s unlikely the agency will change its mind about the benefits of the drug, she wrote.

Brill also argues the decision to convene a panel of outside experts to review the application is likely an indicator that the FDA has as negative view of it. Over the last 18 months, less than a third of drugs reviewed by an FDA advisory committee have won approval, according to Brill.

At the same time, the meeting will give Acadia a chance to argue its case in public, which it didn’t get the last time around. Doctors treating Alzheimer’s patients who currently have no approved options for hallucinations and delusions may weigh in on the company’s behalf.

“External thought leaders” have been “quite positive” about the drug’s potential after the company’s late-stage study was released, Mizuho Securities analyst Vamil Divan wrote. That study met its goal, and the company was even able to stop it early because of the drug’s apparent effectiveness.

During its subsequent review, the FDA focused on subgroups in the study that didn’t perform as well and some types of dementia patients who weren’t well represented, Acadia said. Coming after earlier indications that the application was on track, the FDA’s negative view of the drug surprised Acadia executives last year and prompted them to accuse regulators for backtracking.