Well on its way towards $40, ACADIA Pharmaceuticals (ACAD) backed off last week. The debt-free company’s valuations are running ahead of fair valuations. Speculation that a buyer will buy ACAD may explain the 28% YTD returns so far. Later this month, the company reports quarterly earnings. On February 27, management will affirm the strong revenue from NUPLAZID. This drug is approved for the treatment of hallucinations and delusions associated with Parkinson’s disease psychosis.No cash raiseUnlike other biotech firms that sell shares when the stock touches new highs, ACAD is unlikely to sell stock. It has a sold $5.05 per share in cash. Last quarter, revenue of $5.3 million is not meaningful but this quarter, Nuplazid on Medicare formularies should translate to significant sales. The ramp up in sales should offset the opex costs. Though a loss is possible, the company may achieve breakeven within a few quarters.ADP NumbersAcadia’s stock will hold up if ADP trials shows efficacy. If the company demonstrates the drug has indicates beyond PDP, ACAD will proceed with filing for approval in the EU.ValuationAssuming Acadia achieves revenue growth in fiscal 2016 and growth between 11 – 25% in the next 9 years afterward, ACAD is worth $40 - $50 a share.