LigaChem Biosciences Inc. (KOSDAQ:141080) Has Found A Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at LigaChem Biosciences Inc.'s (KOSDAQ:141080) future prospects. LigaChem Biosciences Inc., a clinical stage biopharmaceutical company, engages in the discovery and development of medicines for unmet medical needs. With the latest financial year loss of ₩74b and a trailing-twelve-month loss of ₩34b, the ₩3.9t market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is LigaChem Biosciences' 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.

See our latest analysis for LigaChem Biosciences

Consensus from 4 of the South Korean Life Sciences analysts is that LigaChem Biosciences is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of ₩18b in 2024. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 74% 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.

Given this is a high-level overview, we won’t go into details of LigaChem Biosciences' upcoming projects, however, bear in mind that generally life science companies, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 1.9% 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 LigaChem Biosciences 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 LigaChem Biosciences, take a look at LigaChem Biosciences' company page on Simply Wall St. We've also put together a list of key factors you should look at:

1. Valuation: What is LigaChem Biosciences 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 LigaChem Biosciences 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 LigaChem Biosciences’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.

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.