We Might See A Profit From Foresee Pharmaceuticals Co., Ltd. (GTSM:6576) Soon

Foresee Pharmaceuticals Co., Ltd. (GTSM:6576) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Foresee Pharmaceuticals Co., Ltd., clinical-stage pharmaceutical company, engages in the development and commercialization of drugs in Taiwan and Europe. The NT$13b market-cap company posted a loss in its most recent financial year of NT$487m and a latest trailing-twelve-month loss of NT$546m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Foresee Pharmaceuticals' 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.

See our latest analysis for Foresee Pharmaceuticals

According to the 2 industry analysts covering Foresee Pharmaceuticals, the consensus is that breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of NT$163m in 2021. The company is therefore projected to breakeven around 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 127% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Foresee Pharmaceuticals' growth isn’t the focus of this broad overview, though, take into account that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 21% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Foresee Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Foresee Pharmaceuticals' company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:

1. Valuation: What is Foresee Pharmaceuticals 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 Foresee Pharmaceuticals 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 Foresee Pharmaceuticals’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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