Analysts Expect Breakeven For Basilea Pharmaceutica AG (VTX:BSLN) Before Long

Basilea Pharmaceutica AG (VTX:BSLN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Basilea Pharmaceutica AG, a commercial stage biopharmaceutical company, focuses on the development of products that address the medical needs in the therapeutic areas of oncology and anti-infectives. The CHF566m market-cap company announced a latest loss of CHF15m on 31 December 2020 for its most recent financial year result. The most pressing concern for investors is Basilea Pharmaceutica's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Basilea Pharmaceutica

Basilea Pharmaceutica is bordering on breakeven, according to the 7 Swiss Biotechs analysts. They expect the company to post a final loss in 2022, before turning a profit of CHF51m in 2023. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 58% year-on-year, on average, which signals high confidence from analysts. 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 Basilea Pharmaceutica's upcoming projects, though, keep in mind that generally 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.

One thing we would like to bring into light with Basilea Pharmaceutica is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are key fundamentals of Basilea Pharmaceutica 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 Basilea Pharmaceutica, take a look at Basilea Pharmaceutica's company page on Simply Wall St. We've also put together a list of key aspects you should further research:

1. Valuation: What is Basilea Pharmaceutica 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 Basilea Pharmaceutica 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 Basilea Pharmaceutica’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. 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.
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