Acadia Pharmaceuticals (ACAD 8.93%) has taken investors on something of a wild ride so far in 2020. There have been multiple share price swings of 20% or more this year. After a nice rise in recent weeks, Acadia could be headed for yet another downturn.

The drugmaker announced its third-quarter results after the market closed on Wednesday. Here are the highlights from Acadia's Q3 update.

Healthcare provider holding a pill between their index finger and thumb.

Image Source: Getty Images.

By the numbers

Let's start with the good news. Acadia reported revenue in the third quarter of $120.6 million, a 27% year-over-year jump. This result also topped the average analysts' revenue estimate of $118.8 million.

Unfortunately, Acadia's bottom line didn't look as good. The company announced a net loss in the third quarter of $84.7 million, or $0.54 per share, based on generally accepted accounting principles (GAAP). This reflected improvement from the net loss of $42 million, or $0.29 per share, posted in the prior-year period. However, it was considerably worse than the Wall Street consensus estimate of a net loss of $0.38 per share.

This loss also caused Acadia to eat into its cash stockpile. The company ended the third quarter with cash, cash equivalents, and investment securities of $644.4 million. Its cash position stood at $697.4 million as of Dec. 31, 2019.

Behind the numbers

All of Acadia's revenue was generated by its sole approved product, Nuplazid, which is used to treat hallucinations and delusions associated with Parkinson's disease psychosis. The drug continued to pick up momentum in this indication.

However, Acadia's significant spending increase more than offset the sales gains made by Nuplazid. The company's research and development costs nearly doubled year over year to $120.1 million. Much of this increase ($52.8 million) stemmed from Acadia's acquisition of CerSci Therapeutics.

The drugmaker's selling, general, and administrative expenses in Q3 also rose 12% year over year to $81.6 million. Acadia attributed most of the increase to higher advertising and promotional spending and to increased personnel and related costs.

Acadia also racked up significant noncash stock-based compensation expenses of $21.4 million in the third quarter. However, this amount was a little lower than the $22 million reported in the prior-year period.

Looking ahead

Acadia expects that Nuplazid sales for full-year 2020 will be between $430 million and $450 million. The company anticipates GAAP research and development expenses of $325 million to $340 million, up from its previous outlook of $265 million to $280 million. This change stemmed primarily from the upfront transaction expenses related to the CerSci Therapeutics acquisition.

Arguably the most important thing for investors to watch with the biotech stock is Acadia's pursuit of a second approved indication for Nuplazid. The Food and Drug Administration is scheduled to make a decision on approval for the drug in treating dementia-related psychosis by April 3, 2021.

Several big pharma stocks jumped on Wednesday with the election results pointing toward the likelihood that neither major political party would control both houses of Congress. Acadia's shares didn't rise as much as these stocks did, but a divided government could work to the company's advantage by reducing the prospects of major changes that could negatively impact its prospects.