Egetis Therapeutics AB (publ) (STO:EGTX): Is Breakeven Near?

We feel now is a pretty good time to analyse Egetis Therapeutics AB (publ)'s (STO:EGTX) business as it appears the company may be on the cusp of a considerable accomplishment. Egetis Therapeutics AB (publ), a pharmaceutical company, focuses on projects in late-stage development for the treatment of serious diseases with unmet medical needs in the orphan drug segment. The kr1.4b market-cap company’s loss lessened since it announced a kr327m loss in the full financial year, compared to the latest trailing-twelve-month loss of kr319m, as it approaches breakeven. As path to profitability is the topic on Egetis Therapeutics' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Egetis Therapeutics

Egetis Therapeutics is bordering on breakeven, according to the 5 Swedish Biotechs analysts. They expect the company to post a final loss in 2025, before turning a profit of kr128m in 2026. Therefore, the company is expected to breakeven roughly 2 years from now. 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 90% is expected, which signals high confidence from analysts. 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 Egetis Therapeutics given that this is a high-level summary, though, take into account that generally 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 we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 27% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Egetis Therapeutics 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 Egetis Therapeutics, take a look at Egetis Therapeutics' company page on Simply Wall St. We've also put together a list of important aspects you should further examine:

1. Valuation: What is Egetis Therapeutics 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 Egetis Therapeutics 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 Egetis Therapeutics’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.