When Will Botanix Pharmaceuticals Limited (ASX:BOT) Turn A Profit?

With the business potentially at an important milestone, we thought we'd take a closer look at Botanix Pharmaceuticals Limited's (ASX:BOT) future prospects. Botanix Pharmaceuticals Limited engages in the research and development of dermatology and antimicrobial products in Australia. The AU$473m market-cap company posted a loss in its most recent financial year of AU$9.2m and a latest trailing-twelve-month loss of AU$10m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Botanix Pharmaceuticals' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Botanix Pharmaceuticals

Botanix Pharmaceuticals is bordering on breakeven, according to some Australian Pharmaceuticals analysts. They expect the company to post a final loss in 2024, before turning a profit of AU$9.3b in 2025. So, the company is predicted to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 121% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Botanix Pharmaceuticals' growth isn’t the focus of this broad overview, though, keep in mind that by and large a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we’d like to point out is that Botanix Pharmaceuticals has no debt on its balance sheet, which is quite unusual for a cash-burning pharma, which usually has a high level of debt relative to its equity. The company 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 Botanix Pharmaceuticals, so if you are interested in understanding the company at a deeper level, take a look at Botanix Pharmaceuticals' company page on Simply Wall St. We've also put together a list of pertinent aspects you should further examine:

1. Valuation: What is Botanix Pharmaceuticals 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 Botanix Pharmaceuticals 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 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.