When Will Ensysce Biosciences, Inc. (NASDAQ:ENSC) Breakeven?

We feel now is a pretty good time to analyse Ensysce Biosciences, Inc.'s (NASDAQ:ENSC) business as it appears the company may be on the cusp of a considerable accomplishment. Ensysce Biosciences, Inc., a clinical-stage pharmaceutical company, engages in developing various prescription drugs for severe pain relief in opioid misuse, abuse, and overdose in the United States. With the latest financial year loss of US$11m and a trailing-twelve-month loss of US$11m, the US$2.3m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Ensysce Biosciences' 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 Ensysce Biosciences

According to some industry analysts covering Ensysce Biosciences, breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$70m in 2026. So, the company is predicted to breakeven approximately 2 years from today. 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 99%, which is extremely buoyant. 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 Ensysce Biosciences' upcoming projects, but, bear in mind that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 31% of equity. This means that it 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:

This article is not intended to be a comprehensive analysis on Ensysce Biosciences, so if you are interested in understanding the company at a deeper level, take a look at Ensysce Biosciences' 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 Ensysce Biosciences' 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 Ensysce Biosciences' 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.