When Can We Expect A Profit From Oncimmune Holdings plc (LON:ONC)?

With the business potentially at an important milestone, we thought we'd take a closer look at Oncimmune Holdings plc's (LON:ONC) future prospects. Oncimmune Holdings plc, an immunodiagnostics company, develops solutions for immuno-oncology, autoimmune disease and infectious diseases in the United Kingdom, North America, Europe, and internationally. The UK£15m market-cap company announced a latest loss of UK£6.2m on 31 August 2023 for its most recent financial year result. The most pressing concern for investors is Oncimmune Holdings' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Oncimmune Holdings

Expectations from some of the British Biotechs analysts is that Oncimmune Holdings is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of UK£552k in 2025. Therefore, the company is expected to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 107%, which is extremely buoyant. 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 Oncimmune Holdings given that this is a high-level summary, though, keep in mind that by and large 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 issue worth mentioning. Oncimmune Holdings currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Oncimmune Holdings 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 Oncimmune Holdings 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 Oncimmune Holdings’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.