Merrill Lynch Has 3 Top BioPharma Picks to Win From the Aging of America

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When investors hear the term “The Silver Economy,” some may think of the metal silver. Other investors think of this as the aging trends happening in the world. There are now, or will be soon, a record number of elderly and aging adults who need care of some sort. A Merrill Lynch report has a whole wave of companies featured as Global Ageing Primer Picks.

While much of the report targets how society is not prepared to deal with this tidal wave of the elderly, it also sees opportunity in several sectors. The firm sees a multi-trillion dollar opportunity in and around health care, financials, aged-care and consumer operations.

24/7 Wall St. decided to first focus on the biotech and pharmaceutical picks from the firm here. These companies are all rated as Buy at Merrill Lynch, and the firm assigned a “High” exposure to longevity. This implies that each one has ageing-related products, technologies, services and solutions as core to the business model, with a material amount of sales or growth being a driver.

ACADIA Pharmaceuticals

Besides being rated as Buy, ACADIA Pharmaceuticals Inc. (NASDAQ: ACAD) has a $40 price objective at Merrill Lynch. The firm also most recently covered ACADIA because Nuplazid was priced at a premium to other antipsychotic drugs for its June launch. The company expects a slow launch due to CNS drug prescription and patient trends.

After receiving FDA approval for its Parkinson’s disease psychosis drug, at least some watchers think it could make for an attractive buyout target for a larger biotech or pharmaceuticals buyer.

ACADIA’s quote from CEO Steve Davis on May 5 said:

We are very excited about the recent FDA approval of NUPLAZID, the first and only drug approved for the treatment of hallucinations and delusions associated with Parkinson’s disease psychosis. Parkinson’s psychosis tends to strike in the more advanced stages of Parkinson’s disease – at a time when patients are often experiencing significant challenges in controlling their motor symptoms such as tremor, slow movement and muscle rigidity. For the first time, physicians will have a drug to treat hallucinations and delusions without worsening motor function in Parkinson’s psychosis patients. We look forward to making NUPLAZID available to physicians and patients in June.

ACADIA has a $3.3 billion market cap, and its $29.25 share price is against a 52-week trading range of $16.64 to $51.99.