Oxford Biomedica plc (LON:OXB): Is Breakeven Near?

With the business potentially at an important milestone, we thought we'd take a closer look at Oxford Biomedica plc's (LON:OXB) future prospects. Oxford Biomedica plc, a contract development and manufacturing organization, focuses on delivering therapies to patients worldwide. The UK£786m market-cap company posted a loss in its most recent financial year of UK£43m and a latest trailing-twelve-month loss of UK£37m shrinking the gap between loss and breakeven. The most pressing concern for investors is Oxford Biomedica's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

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According to the 8 industry analysts covering Oxford Biomedica, the consensus is that breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of UK£20m in 2027. The company is therefore projected to breakeven around 2 years 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 68%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Oxford Biomedica's growth isn’t the focus of this broad overview, though, keep in mind that typically 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.

See our latest analysis for Oxford Biomedica

One thing we would like to bring into light with Oxford Biomedica is its debt-to-equity ratio of 112%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Oxford Biomedica, so if you are interested in understanding the company at a deeper level, take a look at Oxford Biomedica's company page on Simply Wall St. We've also compiled a list of essential factors you should further examine:

1. Valuation: What is Oxford Biomedica 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 Oxford Biomedica 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 Oxford Biomedica’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.