Molecular Partners AG (VTX:MOLN) Could Be Less Than A Year Away From Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at Molecular Partners AG's (VTX:MOLN) future prospects. Molecular Partners AG operates as a clinical-stage biopharmaceutical company. On 31 December 2020, the CHF598m market-cap company posted a loss of CHF63m for its most recent financial year. Many investors are wondering about the rate at which Molecular Partners will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Molecular Partners

According to the 6 industry analysts covering Molecular Partners, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of CHF3.8m in 2021. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 65% year-on-year, on average, which is rather optimistic! 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 Molecular Partners given that this is a high-level summary, though, take into account that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. 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. Molecular Partners currently has no debt on its balance sheet, which is rare for a loss-making biotech, 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:

There are key fundamentals of Molecular Partners 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 Molecular Partners, take a look at Molecular Partners' company page on Simply Wall St. We've also compiled a list of key aspects you should look at:

1. Valuation: What is Molecular Partners 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 Molecular Partners 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 Molecular Partners’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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