Loss-Making Xspray Pharma AB (publ) (STO:XSPRAY) Expected To Breakeven In The Medium-Term

With the business potentially at an important milestone, we thought we'd take a closer look at Xspray Pharma AB (publ)'s (STO:XSPRAY) future prospects. Xspray Pharma AB (publ), a pharmaceutical company, engages in the development of protein kinase inhibitors for targeted cancer treatments in Sweden. The kr1.4b market-cap company posted a loss in its most recent financial year of kr180m and a latest trailing-twelve-month loss of kr258m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Xspray Pharma'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 Xspray Pharma

According to the 2 industry analysts covering Xspray Pharma, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of kr818m in 2026. Therefore, the company is expected to breakeven just over a year from today. 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 135%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Xspray Pharma's growth isn’t the focus of this broad overview, but, bear in mind that generally 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. Xspray Pharma 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:

This article is not intended to be a comprehensive analysis on Xspray Pharma, so if you are interested in understanding the company at a deeper level, take a look at Xspray Pharma's company page on Simply Wall St. We've also put together a list of essential aspects you should look at:

1. Historical Track Record: What has Xspray Pharma'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 Xspray Pharma'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.