Aprea Therapeutics, Inc. (NASDAQ:APRE): Is Breakeven Near?

With the business potentially at an important milestone, we thought we'd take a closer look at Aprea Therapeutics, Inc.'s (NASDAQ:APRE) future prospects. Aprea Therapeutics, Inc., a clinical-stage biopharmaceutical company, focuses on developing and commercializing novel synthetic lethality-based cancer therapeutics that targets DNA damage response pathways. With the latest financial year loss of US$13m and a trailing-twelve-month loss of US$13m, the US$6.4m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Aprea Therapeutics' 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.

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According to the 2 industry analysts covering Aprea Therapeutics, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$880k in 2027. Therefore, the company is expected to breakeven roughly 2 years 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 78%, 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 Aprea Therapeutics given that this is a high-level summary, but, take into account that by and large a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

View our latest analysis for Aprea Therapeutics

Before we wrap up, there’s one aspect worth mentioning. Aprea Therapeutics 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 Aprea Therapeutics, so if you are interested in understanding the company at a deeper level, take a look at Aprea Therapeutics' company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:

1. Historical Track Record: What has Aprea Therapeutics' 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 Aprea Therapeutics' 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.