Market Sentiment Around Loss-Making Oryzon Genomics S.A. (BME:ORY)

With the business potentially at an important milestone, we thought we'd take a closer look at Oryzon Genomics S.A.'s (BME:ORY) future prospects. Oryzon Genomics S.A., a clinical stage biopharmaceutical company, engages in the discovery and development of epigenetics-based therapeutics for patients with cancer and CNS disorders. The €117m market-cap company announced a latest loss of US$3.7m on 31 December 2023 for its most recent financial year result. The most pressing concern for investors is Oryzon Genomics' 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 Oryzon Genomics

Consensus from 4 of the Spanish Biotechs analysts is that Oryzon Genomics is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of US$5.0m in 2026. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 66% year-on-year, on average, 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 Oryzon Genomics given that this is a high-level summary, but, bear 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.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 25% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Oryzon Genomics, so if you are interested in understanding the company at a deeper level, take a look at Oryzon Genomics' company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:

1. Historical Track Record: What has Oryzon Genomics' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Oryzon Genomics' 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.