OncoZenge AB (publ)'s (STO:ONCOZ) Shift From Loss To Profit

We feel now is a pretty good time to analyse OncoZenge AB (publ)'s (STO:ONCOZ) business as it appears the company may be on the cusp of a considerable accomplishment. OncoZenge AB (publ), a pharmaceutical company, engages in the development of treatment for pain relief in patients suffering from oral pain caused by radiation therapy and chemotherapy for cancer in Sweden. The kr121m market-cap company posted a loss in its most recent financial year of kr16m and a latest trailing-twelve-month loss of kr12m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which OncoZenge 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 OncoZenge

Expectations from some of the Swedish Pharmaceuticals analysts is that OncoZenge is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of kr3.9m in 2026. The company is therefore projected to breakeven around 2 years from today. 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 89% is expected, which is extremely buoyant. 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 OncoZenge given that this is a high-level summary, however, keep in mind that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one aspect worth mentioning. OncoZenge currently has no debt on its balance sheet, which is quite unusual for a cash-burning pharma, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of OncoZenge 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 OncoZenge, take a look at OncoZenge's company page on Simply Wall St. We've also put together a list of essential factors you should further examine:

1. Historical Track Record: What has OncoZenge'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 OncoZenge'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.