Ascelia Pharma AB (publ)'s (STO:ACE) Profit Outlook

With the business potentially at an important milestone, we thought we'd take a closer look at Ascelia Pharma AB (publ)'s (STO:ACE) future prospects. Ascelia Pharma AB (publ), a biotech company, develops identifies, develops, and commercializes novel drugs to treat orphan oncology treatments in Sweden. The kr376m market-cap company posted a loss in its most recent financial year of kr80m and a latest trailing-twelve-month loss of kr89m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Ascelia Pharma will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

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Consensus from 3 of the Swedish Biotechs analysts is that Ascelia Pharma is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of kr33m in 2026. So, the company is predicted to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 102% is expected, 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 Ascelia Pharma given that this is a high-level summary, though, bear in mind that typically 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.

Check out our latest analysis for Ascelia Pharma

Before we wrap up, there’s one aspect worth mentioning. Ascelia Pharma currently has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

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

1. Valuation: What is Ascelia Pharma 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 Ascelia Pharma 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 Ascelia Pharma’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.