With the business potentially at an important milestone, we thought we'd take a closer look at ACADIA Pharmaceuticals Inc.'s (NASDAQ:ACAD) future prospects. ACADIA Pharmaceuticals Inc., a biopharmaceutical company, focuses on the development and commercialization of small molecule drugs that address unmet medical needs in central nervous system disorders. With the latest financial year loss of US$282m and a trailing-twelve-month loss of US$260m, the US$3.6b market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on ACADIA Pharmaceuticals' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
ACADIA Pharmaceuticals is bordering on breakeven, according to the 21 American Biotechs analysts. They expect the company to post a final loss in 2022, before turning a profit of US$10m in 2023. So, the company is predicted to breakeven approximately 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 78% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of ACADIA Pharmaceuticals' upcoming projects, but, take into account that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. ACADIA Pharmaceuticals currently has no debt on its balance sheet, which is rare for a loss-making biotech, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
This article is not intended to be a comprehensive analysis on ACADIA Pharmaceuticals, so if you are interested in understanding the company at a deeper level, take a look at ACADIA Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of pertinent factors you should look at:
- Valuation: What is ACADIA Pharmaceuticals worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether ACADIA Pharmaceuticals is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on ACADIA Pharmaceuticals’s board and the CEO’s background.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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