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Kiadis Pharma N.V.'s (AMS:KDS): Kiadis Pharma N.V., a clinical stage biopharmaceutical company, engages in the pharmaceutical development of cell-based immunotherapy products in the field of blood building system diseases. With the latest financial year loss of -€17.0m and a trailing-twelve month of -€22.6m, the €240m market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is KDS’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for KDS’s growth and when analysts expect the company to become profitable.
Check out our latest analysis for Kiadis Pharma
KDS is bordering on breakeven, according to the 4 Biotechs analysts. They expect the company to post a final loss in 2022, before turning a profit of €204m in 2023. So, KDS is predicted to breakeven approximately 4 years from now. In order to meet this breakeven date, I calculated the rate at which KDS must grow year-on-year. It turns out an average annual growth rate of 60% is expected, 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, though, take into account that by and large biotechs, 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 I wrap up, there’s one issue worth mentioning. KDS currently has a debt-to-equity ratio of 123%. 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 compiled a list of relevant aspects you should further research:
- 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.
- 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.
- 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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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.