Paradigm Biopharmaceuticals Limited (ASX:PAR): Are Analysts Optimistic?

We feel now is a pretty good time to analyse Paradigm Biopharmaceuticals Limited's (ASX:PAR) business as it appears the company may be on the cusp of a considerable accomplishment. Paradigm Biopharmaceuticals Limited engages in the research and development of therapeutic products for human use in Australia. On 30 June 2023, the AU$111m market-cap company posted a loss of AU$52m for its most recent financial year. The most pressing concern for investors is Paradigm Biopharmaceuticals' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Paradigm Biopharmaceuticals

According to some industry analysts covering Paradigm Biopharmaceuticals, breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of AU$13m 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 86% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Paradigm Biopharmaceuticals' upcoming projects, though, bear in mind that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company 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 Paradigm Biopharmaceuticals has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Paradigm Biopharmaceuticals 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 Paradigm Biopharmaceuticals 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 Paradigm Biopharmaceuticals’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.