When Can We Expect A Profit From Blueprint Medicines Corporation (NASDAQ:BPMC)?

With the business potentially at an important milestone, we thought we'd take a closer look at Blueprint Medicines Corporation's (NASDAQ:BPMC) future prospects. Blueprint Medicines Corporation, a precision therapy company, develops medicines for genomically defined cancers and blood disorders in the United States and internationally. With the latest financial year loss of US$507m and a trailing-twelve-month loss of US$205m, the US$5.2b market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Blueprint Medicines' 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.

See our latest analysis for Blueprint Medicines

Blueprint Medicines is bordering on breakeven, according to the 17 American Biotechs analysts. They expect the company to post a final loss in 2025, before turning a profit of US$85m in 2026. 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 68%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Blueprint Medicines' upcoming projects, but, bear in mind 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.

Before we wrap up, there’s one issue worth mentioning. Blueprint Medicines currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Blueprint Medicines, so if you are interested in understanding the company at a deeper level, take a look at Blueprint Medicines' company page on Simply Wall St. We've also compiled a list of pertinent factors you should further research:

1. Valuation: What is Blueprint Medicines 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 Blueprint Medicines 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 Blueprint Medicines’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.