$ACAD Acadia Pharmaceuticals (NASDAQ: ACAD) is off to a better start to commercializing its recently approved drug Nuplazid than most small developmental stocks at this stage of their growth trajectory. In its first two full quarters on the market, Nuplazid has easily exceeded sale projections, which is more than encouraging.

As important, there is continual anecdotal evidence that many physicians are using it to treat other forms of dementia. The drug is approved to treat psychosis in Parkinsons, which presents similar symptoms to that of Alzheimers and Schizophrenia, both of which Nuplazid is being tested in late stage trials to treat.

Parkinsons is probably a $1 billion annual market in the medium-term for Acadia. Add in the other two indications for Alzheimers and Schizophrenia and you probably get close to $3 billion. However, even if not approved by the FDA to treat the psychosis in those indications, the drug seems destined to see significant “off label” use.

The stock continues to ebb and flow as buyout speculation comes and goes around the shares. I think the stock’s longer-term destiny is much like Relypsa. I have owned the shares since under $20 before Nuplazid was approved. I still hold most of my original stake as I think the shares are worth 40% to 60% more in an acquisition.