Breakeven On The Horizon For Lysogene S.A. (EPA:LYS)

With the business potentially at an important milestone, we thought we'd take a closer look at Lysogene S.A.'s (EPA:LYS) future prospects. Lysogene S.A. engages in the research and clinical development of gene therapy for neurodegenerative disorders. On 31 December 2020, the €46m market-cap company posted a loss of €5.1m for its most recent financial year. As path to profitability is the topic on Lysogene's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Lysogene

Lysogene is bordering on breakeven, according to some French Biotechs analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of €45m in 2022. The company is therefore projected 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 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 109% 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.

Underlying developments driving Lysogene's growth isn’t the focus of this broad overview, but, take into account that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 6.5% 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:

There are key fundamentals of Lysogene 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 Lysogene, take a look at Lysogene's company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:

1. Historical Track Record: What has Lysogene'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 Lysogene'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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