ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. 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. The US$2.6b market-cap company posted a loss in its most recent financial year of US$168m and a latest trailing-twelve-month loss of US$205m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is ACADIA Pharmaceuticals' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for ACADIA Pharmaceuticals

Consensus from 20 of the American Biotechs analysts is that ACADIA Pharmaceuticals is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$22m in 2024. The company is therefore projected to breakeven around 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 77%, 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, however, bear in mind that by and large a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there's one aspect worth mentioning. ACADIA Pharmaceuticals currently has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which typically has high 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.

Next Steps:

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 put together a list of relevant factors you should look at:

1. 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.
2. 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.
3. 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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.