When Will CTI BioPharma Corp (NASDAQ:CTIC) Become Profitable?

CTI BioPharma Corp's (NASDAQ:CTIC): CTI BioPharma Corp., a biopharmaceutical company, focuses on the acquisition, development, and commercialization of novel targeted therapies for blood-related cancers in the United States and internationally. The US$263.23M market-cap posted a loss in its most recent financial year of -US$45.02M and a latest trailing-twelve-month loss of -US$29.29M shrinking the gap between loss and breakeven. The most pressing concern for investors is CTIC’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for CTIC, its year of breakeven and its implied growth rate.

According to the industry analysts covering CTIC, breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$12.30M in 2022. So, CTIC is predicted to breakeven approximately 4 years from today. What rate will CTIC have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 34.57%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving CTIC’s growth isn’t the focus of this broad overview, however, bear in mind that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing I’d like to point out is that CTIC has managed its capital prudently, with debt making up 18.35% of equity. This means that CTIC 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 key fundamentals of CTIC which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at CTIC, take a look at CTIC’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should further research:

1. Valuation: What is CTIC 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 CTIC 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 CTI BioPharma’s board and the CEO’s back ground.
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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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.