Market Sentiment Around Loss-Making Lipigon Pharmaceuticals AB (publ) (STO:LPGO)

We feel now is a pretty good time to analyse Lipigon Pharmaceuticals AB (publ)'s (STO:LPGO) business as it appears the company may be on the cusp of a considerable accomplishment. Lipigon Pharmaceuticals AB (publ) develops drugs for lipid related diseases in Sweden. The company’s loss has recently broadened since it announced a kr12m loss in the full financial year, compared to the latest trailing-twelve-month loss of kr22m, moving it further away from breakeven. Many investors are wondering about the rate at which Lipigon Pharmaceuticals 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.

View our latest analysis for Lipigon Pharmaceuticals

Lipigon Pharmaceuticals is bordering on breakeven, according to some Swedish Biotechs analysts. They expect the company to post a final loss in 2025, before turning a profit of kr99m in 2026. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 140% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Lipigon Pharmaceuticals' growth isn’t the focus of this broad overview, but, take into account that typically 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.

One thing we’d like to point out is that Lipigon Pharmaceuticals has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high 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 Lipigon Pharmaceuticals, so if you are interested in understanding the company at a deeper level, take a look at Lipigon Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of key aspects you should further research:

1. Historical Track Record: What has Lipigon Pharmaceuticals' 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 Lipigon Pharmaceuticals' 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.