Market Sentiment Around Loss-Making Xbrane Biopharma AB (publ) (STO:XBRANE)

Xbrane Biopharma AB (publ) (STO:XBRANE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Xbrane Biopharma AB (publ), a biotechnology company, develops, manufactures, and sells biosimilars. On 31 December 2020, the kr2.1b market-cap company posted a loss of kr226m for its most recent financial year. The most pressing concern for investors is Xbrane Biopharma's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Xbrane Biopharma

Consensus from 2 of the Swedish Biotechs analysts is that Xbrane Biopharma is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of kr15m in 2022. So, the company is predicted to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 84%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Xbrane Biopharma's upcoming projects, though, keep in mind that typically 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.

One thing we’d like to point out is that Xbrane Biopharma has no debt on its balance sheet, which is rare for a loss-making 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 too many aspects of Xbrane Biopharma to cover in one brief article, but the key fundamentals for the company can all be found in one place – Xbrane Biopharma's company page on Simply Wall St. We've also compiled a list of essential factors you should further examine:

1. Valuation: What is Xbrane Biopharma worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Xbrane Biopharma is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Xbrane Biopharma’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. 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.
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