We Might See A Profit From Humanigen, Inc. (NASDAQ:HGEN) Soon

With the business potentially at an important milestone, we thought we'd take a closer look at Humanigen, Inc.'s (NASDAQ:HGEN) future prospects. Humanigen, Inc., a clinical stage biopharmaceutical company, develops a portfolio of immuno-oncology and immunology monoclonal antibodies in the United States. The US$1.2b market-cap company announced a latest loss of US$90m on 31 December 2020 for its most recent financial year result. Many investors are wondering about the rate at which Humanigen will turn a profit, with the big question being “when will the company breakeven?” 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 Humanigen

According to the 7 industry analysts covering Humanigen, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$252m in 2021. So, the company is predicted to breakeven approximately a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 10% is expected, which seems relatively fair. However, if this rate turns out to be too buoyant, the company may become profitable later than analysts predict.

Given this is a high-level overview, we won’t go into details of Humanigen's upcoming projects, but, keep in mind that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. This means, a double-digit growth rate is not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we’d like to point out is that Humanigen has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are too many aspects of Humanigen to cover in one brief article, but the key fundamentals for the company can all be found in one place – Humanigen's company page on Simply Wall St. We've also put together a list of pertinent aspects you should further examine:

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.

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This article by Simply Wall St is general in nature. 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.
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