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 innovative medicines that address unmet medical needs in central nervous system (CNS) disorders and rare diseases in the United States. On 31 December 2023, the US$2.9b market-cap company posted a loss of US$61m for its most recent financial year. Many investors are wondering about the rate at which ACADIA Pharmaceuticals will turn a profit, with the big question being "when will the company breakeven?" Below we will provide a high-level summary of the industry analysts' expectations for the company.

According to the 21 industry analysts covering ACADIA Pharmaceuticals, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$112m in 2024. Therefore, the company is expected to breakeven roughly 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 42%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for ACADIA Pharmaceuticals given that this is a high-level summary, though, bear in mind that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we'd like to point out is that ACADIA Pharmaceuticals 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:

There are too many aspects of ACADIA Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – ACADIA Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of essential factors you should further examine:

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.