Biovica International AB (publ) (STO:BIOVIC B): When Will It Breakeven?

With the business potentially at an important milestone, we thought we'd take a closer look at Biovica International AB (publ)'s (STO:BIOVIC B) future prospects. Biovica International AB (publ), a biotech company, develops and commercializes novel blood-based biomarker assays that enhance the monitoring and predicting of cancer therapies in the United States of America. The kr210m market-cap company announced a latest loss of kr125m on 30 April 2024 for its most recent financial year result. The most pressing concern for investors is Biovica International's 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.

Check out our latest analysis for Biovica International

According to the 2 industry analysts covering Biovica International, the consensus is that breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of kr25m in 2027. Therefore, the company is expected to breakeven roughly 3 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 74%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Biovica International given that this is a high-level summary, though, take into account that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that Biovica International has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Biovica International 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 Biovica International, take a look at Biovica International's company page on Simply Wall St. We've also compiled a list of relevant factors you should look at:

1. Valuation: What is Biovica International 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 Biovica International 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 Biovica International’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.