ImmunoGen, Inc. (NASDAQ:IMGN) Has Found A Path To Profitability

We feel now is a pretty good time to analyse ImmunoGen, Inc.'s (NASDAQ:IMGN) business as it appears the company may be on the cusp of a considerable accomplishment. ImmunoGen, Inc., a commercial-stage biotechnology company, focuses on developing and commercializing the antibody-drug conjugates (ADCs) for cancer patients. The US$7.9b market-cap company’s loss lessened since it announced a US$223m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$74m, as it approaches breakeven. Many investors are wondering about the rate at which ImmunoGen 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.

Check out our latest analysis for ImmunoGen

According to the 15 industry analysts covering ImmunoGen, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$111m in 2024. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 46% year-on-year, on average, 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 ImmunoGen's upcoming projects, but, keep in mind that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 13% 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 ImmunoGen, so if you are interested in understanding the company at a deeper level, take a look at ImmunoGen'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 ImmunoGen 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 ImmunoGen 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 ImmunoGen’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. 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.