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 kr19m market-cap company posted a loss in its most recent financial year of kr12m and a latest trailing-twelve-month loss of kr22m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Lipigon Pharmaceuticals' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

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According to some industry analysts covering Lipigon Pharmaceuticals, breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of kr99m in 2026. 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 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.

We're not going to go through company-specific developments for Lipigon Pharmaceuticals given that this is a high-level summary, however, take into account that by and large 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.

Check out our latest analysis for Lipigon Pharmaceuticals

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:

There are too many aspects of Lipigon Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Lipigon Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:

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.