Is BioVersys (VTX:BIOV) A Risky Investment?

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that 'Volatility is far from synonymous with risk.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. Importantly, BioVersys AG (VTX:BIOV) does carry debt. But is this debt a concern to shareholders?

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Why Does Debt Bring Risk?

Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

How Much Debt Does BioVersys Carry?

As you can see below, at the end of June 2025, BioVersys had CHF18.0m of debt, up from CHF15.6m a year ago. Click the image for more detail. But it also has CHF92.1m in cash to offset that, meaning it has CHF74.1m net cash.

How Strong Is BioVersys' Balance Sheet?

The latest balance sheet data shows that BioVersys had liabilities of CHF10.2m due within a year, and liabilities of CHF14.6m falling due after that. On the other hand, it had cash of CHF92.1m and CHF1.29m worth of receivables due within a year. So it can boast CHF68.5m more liquid assets than total liabilities.

This surplus strongly suggests that BioVersys has a rock-solid balance sheet (and the debt is of no concern whatsoever). On this view, lenders should feel as safe as the beloved of a black-belt karate master. Succinctly put, BioVersys boasts net cash, so it's fair to say it does not have a heavy debt load! There's no doubt that we learn most about debt from the balance sheet. But ultimately the future profitability of the business will decide if BioVersys can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

See our latest analysis for BioVersys

Given it has no significant operating revenue at the moment, shareholders will be hoping BioVersys can make progress and gain better traction for the business, before it runs low on cash.

So How Risky Is BioVersys?

Statistically speaking companies that lose money are riskier than those that make money. And we do note that BioVersys had an earnings before interest and tax (EBIT) loss, over the last year. And over the same period it saw negative free cash outflow of CHF17m and booked a CHF19m accounting loss. But the saving grace is the CHF74.1m on the balance sheet. That means it could keep spending at its current rate for more than two years. Even though its balance sheet seems sufficiently liquid, debt always makes us a little nervous if a company doesn't produce free cash flow regularly. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. Case in point: We've spotted 4 warning signs for BioVersys you should be aware of, and 2 of them are significant.

When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.

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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.