Paradigm Biopharmaceuticals Limited (ASX:PAR) Is Expected To Breakeven In The Near Future

Paradigm Biopharmaceuticals Limited (ASX:PAR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Paradigm Biopharmaceuticals Limited engages in the research and development of therapeutic products for human use in Australia. The AU$196m market-cap company announced a latest loss of AU$52m on 30 June 2023 for its most recent financial year result. 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

Paradigm Biopharmaceuticals is bordering on breakeven, according to some Australian Biotechs analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of AU$13m in 2025. The company is therefore projected to breakeven around 2 years from today. 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 extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Paradigm Biopharmaceuticals given that this is a high-level summary, however, keep in mind that by and large biotechs, 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 we wrap up, there’s one aspect worth mentioning. Paradigm Biopharmaceuticals currently has no debt on its balance sheet, which is quite unusual for a cash-burning 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:

There are key fundamentals of Paradigm Biopharmaceuticals which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Paradigm Biopharmaceuticals, take a look at Paradigm Biopharmaceuticals' company page on Simply Wall St. We've also compiled a list of essential aspects you should further research:

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.