Breakeven Is Near for Scandion Oncology A/S (STO:SCOL)

We feel now is a pretty good time to analyse Scandion Oncology A/S' (STO:SCOL) business as it appears the company may be on the cusp of a considerable accomplishment. Scandion Oncology A/S, a clinical-stage biotechnology company, develops medicines for the treatment of chemotherapy resistance. With the latest financial year loss of kr.77m and a trailing-twelve-month loss of kr.44m, the kr154m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Scandion Oncology'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.

View our latest analysis for Scandion Oncology

Expectations from some of the Swedish Biotechs analysts is that Scandion Oncology is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of kr.31m in 2024. So, the company is predicted to breakeven approximately a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 75% is expected, 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 Scandion Oncology given that this is a high-level summary, though, take into account that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. 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. Scandion Oncology 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. 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 Scandion Oncology 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 Scandion Oncology, take a look at Scandion Oncology's company page on Simply Wall St. We've also put together a list of key aspects you should further research:

1. Historical Track Record: What has Scandion Oncology'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 Scandion Oncology'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.