Egetis Therapeutics AB (publ) (STO:EGTX) Is Expected To Breakeven In The Near Future

With the business potentially at an important milestone, we thought we'd take a closer look at Egetis Therapeutics AB (publ)'s (STO:EGTX) future prospects. Egetis Therapeutics AB (publ), a pharmaceutical drug development company, focuses on projects in late-stage development for the treatment of serious rare/niche diseases with unmet medical needs in the orphan drug segment. The kr1.0b market-cap company announced a latest loss of kr179m on 31 December 2020 for its most recent financial year result. Many investors are wondering about the rate at which Egetis Therapeutics will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Egetis Therapeutics

Egetis Therapeutics is bordering on breakeven, according to the 3 Swedish Biotechs analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of kr13m in 2023. So, the company is predicted to breakeven approximately 2 years from now. 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 58%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Egetis Therapeutics' growth isn’t the focus of this broad overview, however, keep in mind that typically 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 The company has managed its capital prudently, with debt making up -0.01% 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 too many aspects of Egetis Therapeutics to cover in one brief article, but the key fundamentals for the company can all be found in one place – Egetis Therapeutics' company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:

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.

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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. 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.
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