Humanigen, Inc.'s (NASDAQ:HGEN) Profit Outlook

Humanigen, Inc. (NASDAQ:HGEN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Humanigen, Inc., a clinical-stage biopharmaceutical company, focuses on preventing and treating an immune hyper-response. The US$24m market-cap company’s loss lessened since it announced a US$71m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$54m, as it approaches breakeven. As path to profitability is the topic on Humanigen's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Humanigen

Humanigen is bordering on breakeven, according to some American Biotechs analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$17m in 2025. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 66% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Humanigen's upcoming projects, but, 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.

Before we wrap up, there’s one issue worth mentioning. Humanigen currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are key fundamentals of Humanigen which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Humanigen, take a look at Humanigen's company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:

1. Valuation: What is Humanigen 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 Humanigen 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 Humanigen’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.

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

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.