Loss-Making Biovica International AB (publ) (STO:BIOVIC B) Expected To Breakeven In The Medium-Term

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 Sweden and internationally. With the latest financial year loss of kr110m and a trailing-twelve-month loss of kr124m, the kr198m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Biovica International's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Biovica International

Consensus from 2 of the Swedish Biotechs analysts is that Biovica International is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of kr14m in 2026. So, the company is predicted to breakeven approximately 2 years 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 78% 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 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. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we’d like to point out is that Biovica International has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which usually has a high level of 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:

This article is not intended to be a comprehensive analysis on Biovica International, so if you are interested in understanding the company at a deeper level, take a look at Biovica International's company page on Simply Wall St. We've also put together a list of essential factors you should further examine:

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.