When Will Iterum Therapeutics plc (NASDAQ:ITRM) Turn A Profit?

Iterum Therapeutics plc (NASDAQ:ITRM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Iterum Therapeutics plc, a clinical-stage pharmaceutical company, engages in developing and commercializing anti-infectives in Ireland, Bermuda, and the United States. With the latest financial year loss of US$38m and a trailing-twelve-month loss of US$28m, the US$20m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Iterum Therapeutics' 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.

Check out our latest analysis for Iterum Therapeutics

Expectations from some of the American Pharmaceuticals analysts is that Iterum Therapeutics is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of US$73k in 2026. Therefore, the company is expected to breakeven roughly 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 73% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Iterum Therapeutics given that this is a high-level summary, though, bear in mind that generally pharmaceuticals, 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 issue worth mentioning. Iterum Therapeutics currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

This article is not intended to be a comprehensive analysis on Iterum Therapeutics, so if you are interested in understanding the company at a deeper level, take a look at Iterum Therapeutics' company page on Simply Wall St. We've also put together a list of relevant factors you should further research:

1. Historical Track Record: What has Iterum Therapeutics' 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 Iterum Therapeutics' 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.