When Will Anavex Life Sciences Corp. (NASDAQ:AVXL) Breakeven?

Anavex Life Sciences Corp. (NASDAQ:AVXL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Anavex Life Sciences Corp., a clinical stage biopharmaceutical company, engages in the development of therapeutics for the treatment of central nervous system diseases in the United States. With the latest financial year loss of US$43m and a trailing-twelve-month loss of US$46m, the US$703m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Anavex Life Sciences' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Anavex Life Sciences

Consensus from 3 of the American Biotechs analysts is that Anavex Life Sciences is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of US$325m in 2026. So, the company is predicted to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 50% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Anavex Life Sciences' growth isn’t the focus of this broad overview, but, bear in mind that typically 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.

One thing we’d like to point out is that Anavex Life Sciences 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. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are too many aspects of Anavex Life Sciences to cover in one brief article, but the key fundamentals for the company can all be found in one place – Anavex Life Sciences' company page on Simply Wall St. We've also put together a list of essential aspects you should further examine:

1. Historical Track Record: What has Anavex Life Sciences' 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 Anavex Life Sciences' 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.