Loss-Making Intra-Cellular Therapies, Inc. (NASDAQ:ITCI) Expected To Breakeven In The Medium-Term

With the business potentially at an important milestone, we thought we'd take a closer look at Intra-Cellular Therapies, Inc.'s (NASDAQ:ITCI) future prospects. Intra-Cellular Therapies, Inc., a biopharmaceutical company, focuses on the discovery, clinical development, and commercialization of small molecule drugs that address medical needs primarily in neuropsychiatric and neurological disorders by targeting intracellular signaling mechanisms in the central nervous system (CNS) in the United States. The US$9.1b market-cap company posted a loss in its most recent financial year of US$140m and a latest trailing-twelve-month loss of US$86m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Intra-Cellular Therapies will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Intra-Cellular Therapies

According to the 15 industry analysts covering Intra-Cellular Therapies, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$30m in 2025. Therefore, the company is expected to breakeven just over a year 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 69% 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.

We're not going to go through company-specific developments for Intra-Cellular Therapies given that this is a high-level summary, but, keep in mind that typically pharmaceuticals, 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 aspect worth mentioning. Intra-Cellular Therapies currently has no debt on its balance sheet, which is rare for a loss-making pharma, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Intra-Cellular Therapies 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 Intra-Cellular Therapies 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 Intra-Cellular Therapies’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.