ACADIA Review

Overview of Acadia Pharmaceuticals

In my portfolio there are 6 stocks, the total volume is ~3.6%.

They are developing drugs for the treatment of diseases of the central nervous system. Key company indicators - here and here. This is the second representative of the biopharmaceutical sector, and the first company in my reviews that is currently unprofitable. Revenue dynamics: $125 million for 2017, $224 million for 2018 and $339 million for 2019. Naturally, there are no P/E and PEG indicators, as there is no current profit). The share price at the time of writing this post is $42.63, capitalization is $6.7 billion.

Strengths of the company:

💪 No debt and ~700 million cash in accounts.

💪 Promising profitability forecasts - the range of expected profit for 2024 is $4.4 - $41.4 per share, with a minimum value of 4.4 $ forward P/E is 9.7.

💪 Insider transactions - in November 2018 Baker Bros. fund. Advisors LP (the company's current largest holder) purchased ~13 million stocks at a price of $17, then in September 2019 the fund bought another 1.5 million stocks at $40, and on March 18 bought another 1 million stocks at a price of $32. By the way, the fund now owns 26.98% of the company and almost 42 million stocks. Not that ACADIA is their favorite (there are other biotechs in the portfolio in larger quantities), but in any case, the actions of the big fish are interesting. The portfolio of the Baker Bros. fund, as of the end of 2019, ACADIA was in 4th place in terms of volume, about 10% of the portfolio. There have also been sales of stocks among Acadia employees over the past 2 years, but without panic dumps.

Conclusion: although ACADIA can hardly be called a startup, rather, it is a company at the stage of commercialization of a potentially very successful drug, however, I consider the investment quite risky (as, indeed, other investments in biotech), so I plan to hold it at ~3-6% of the portfolio. I will not give a forecast for price targets, although I am almost confident in the potential for multiple growth of the stock in the next 4-6 years.

Graphic:

1⃣ Share price 2004-2020

2⃣ Revenue and profit, 2020 and beyond - forecast values

3⃣ Earnings per share, 2020 and beyond - forecast values