Loss-Making Egetis Therapeutics AB (publ) (STO:EGTX) Expected To Breakeven In The Medium-Term

We feel now is a pretty good time to analyse Egetis Therapeutics AB (publ)'s (STO:EGTX) business as it appears the company may be on the cusp of a considerable accomplishment. Egetis Therapeutics AB (publ), a pharmaceutical company, focuses on projects in late-stage development for the treatment of serious diseases with unmet medical needs in the orphan drug segment. On 31 December 2023, the kr1.8b market-cap company posted a loss of kr327m for its most recent financial year. The most pressing concern for investors is Egetis Therapeutics' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Egetis Therapeutics

Egetis Therapeutics is bordering on breakeven, according to the 4 Swedish Biotechs analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of kr105m in 2025. Therefore, the company is expected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 85% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Egetis Therapeutics given that this is a high-level summary, however, bear in mind that typically 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.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 20% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Egetis Therapeutics, so if you are interested in understanding the company at a deeper level, take a look at Egetis Therapeutics' company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:

1. Historical Track Record: What has Egetis Therapeutics' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Egetis Therapeutics' 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.