Kiadis Pharma NV. (AMS:KDS) Is Expected To Breakeven

Kiadis Pharma NV.'s (ENXTAM:KDS): Kiadis Pharma N.V., a clinical stage biopharmaceutical company, focuses on the research and development of cell-based immunotherapy products for the treatment of blood cancers and inherited blood disorders in the Netherlands. The company’s loss has recently broadened since it announced a -€14.79M loss in the full financial year, compared to the latest trailing-twelve-month loss of -€16.87M, moving it further away from breakeven. Many investors are wondering the rate at which KDS will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for KDS’s growth and when analysts expect the company to become profitable.

KDS is bordering on breakeven, according to analysts. They anticipate the company to incur a final loss in 2019, before generating positive profits of €10.34M in 2020. KDS is therefore projected to breakeven around 2 years from now. What rate will KDS have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 52.86%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

I’m not going to go through company-specific developments for KDS given that this is a high-level summary, however, 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.

One thing I would like to bring into light with KDS is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and KDS 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 KDS, so if you are interested in understanding the company at a deeper level, take a look at KDS’s company page on Simply Wall St. I’ve also put together a list of pertinent aspects you should look at:

1. Valuation: What is KDS 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 KDS 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 Kiadis Pharma’s board and the CEO’s back ground.
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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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.