Stock Analysis

Botanix Pharmaceuticals Limited's (ASX:BOT) Path To Profitability

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Botanix Pharmaceuticals Limited's (ASX:BOT): Botanix Pharmaceuticals Limited, a clinical stage cannabinoid therapeutics company, develops therapeutics for serious skin diseases in Australia. The AU$41m market-cap posted a loss in its most recent financial year of -AU$17.0m and a latest trailing-twelve-month loss of -AU$19.9m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on BOT’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for BOT’s growth and when analysts expect the company to become profitable.

See our latest analysis for Botanix Pharmaceuticals

According to the industry analysts covering BOT, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$33m in 2022. Therefore, BOT is expected to breakeven roughly 2 years from today. In order to meet this breakeven date, I calculated the rate at which BOT must grow year-on-year. It turns out an average annual growth rate of 96% 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.

ASX:BOT Past and Future Earnings May 17th 2020
ASX:BOT Past and Future Earnings May 17th 2020

Given this is a high-level overview, I won’t go into details of BOT’s upcoming projects, but, keep in mind that typically pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before I wrap up, there’s one aspect worth mentioning. BOT currently has no debt on its balance sheet, which is quite unusual for a cash-burning pharma, which typically has high debt relative to its equity. BOT currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

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

  1. Valuation: What is BOT worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether BOT is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Botanix Pharmaceuticals’s board and the CEO’s back ground.
  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.

If you spot an error that warrants correction, please contact the editor at This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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