Advicenne S.A.'s (EPA:ALDVI) Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at Advicenne S.A.'s (EPA:ALDVI) future prospects. Advicenne S.A., a specialty pharmaceutical company, develops, commercializes, and markets treatments for rare renal diseases. The €26m market-cap company posted a loss in its most recent financial year of €7.0m and a latest trailing-twelve-month loss of €8.8m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Advicenne's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Advicenne

Advicenne is bordering on breakeven, according to the 2 French Pharmaceuticals analysts. They expect the company to post a final loss in 2024, before turning a profit of €9.1m in 2025. So, the company is predicted to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 47% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Advicenne's upcoming projects, however, take into account 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 that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we would like to bring into light with Advicenne 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:

There are too many aspects of Advicenne to cover in one brief article, but the key fundamentals for the company can all be found in one place – Advicenne's company page on Simply Wall St. We've also put together a list of important factors you should look at:

1. Historical Track Record: What has Advicenne's 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 Advicenne'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.