Loss-Making Newron Pharmaceuticals S.p.A. (VTX:NWRN) Expected To Breakeven In The Medium-Term

We feel now is a pretty good time to analyse Newron Pharmaceuticals S.p.A.'s (VTX:NWRN) business as it appears the company may be on the cusp of a considerable accomplishment. Newron Pharmaceuticals S.p.A., a biopharmaceutical company, focus on the development of novel therapies for the treatment of central nervous system (CNS) and pain in Italy and the United States. The company’s loss has recently broadened since it announced a €16m loss in the full financial year, compared to the latest trailing-twelve-month loss of €19m, moving it further away from breakeven. The most pressing concern for investors is Newron Pharmaceuticals' 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 Newron Pharmaceuticals

According to the 3 industry analysts covering Newron Pharmaceuticals, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of €15m in 2026. 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 40% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Newron Pharmaceuticals given that this is a high-level summary, however, bear in mind that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. 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 Newron Pharmaceuticals is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

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

1. Valuation: What is Newron Pharmaceuticals 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 Newron Pharmaceuticals 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 Newron Pharmaceuticals’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.