Cyclacel Pharmaceuticals, Inc.'s (NASDAQ:CYCC) Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at Cyclacel Pharmaceuticals, Inc.'s (NASDAQ:CYCC) future prospects. Cyclacel Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, develops medicines for the treatment of cancer and other proliferative diseases in the United States, the United Kingdom, and internationally. The US$2.4m market-cap company’s loss lessened since it announced a US$23m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$20m, as it approaches breakeven. As path to profitability is the topic on Cyclacel Pharmaceuticals' 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 Cyclacel Pharmaceuticals

According to the 2 industry analysts covering Cyclacel Pharmaceuticals, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$2.2m in 2026. So, the company is predicted to breakeven approximately 2 years 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 67% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Cyclacel Pharmaceuticals' growth isn’t the focus of this broad overview, though, keep 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. Cyclacel Pharmaceuticals currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are too many aspects of Cyclacel Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Cyclacel Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of essential factors you should further research:

1. Historical Track Record: What has Cyclacel Pharmaceuticals' 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 Cyclacel Pharmaceuticals' 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com