Loss-Making Kancera AB (publ) (STO:KAN) Expected To Breakeven In The Medium-Term

Kancera AB (publ) (STO:KAN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Kancera AB (publ) develops drugs for inflammatory diseases and cancer in Sweden and internationally. The kr117m market-cap company posted a loss in its most recent financial year of kr65m and a latest trailing-twelve-month loss of kr53m shrinking the gap between loss and breakeven. The most pressing concern for investors is Kancera'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.

See our latest analysis for Kancera

According to some industry analysts covering Kancera, breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of kr284m in 2025. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 48% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Kancera's upcoming projects, but, take into account 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, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there’s one aspect worth mentioning. Kancera currently 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 Kancera, so if you are interested in understanding the company at a deeper level, take a look at Kancera's company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:

1. Historical Track Record: What has Kancera's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Kancera'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.