Loss-Making Pardes Biosciences, Inc. (NASDAQ:PRDS) Expected To Breakeven In The Medium-Term

Pardes Biosciences, Inc. (NASDAQ:PRDS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Pardes Biosciences, Inc., a clinical stage biopharmaceutical company, focuses on discovering, developing, and commercializing novel therapeutics to improve the lives of patients suffering from life-threatening disease. On 31 December 2021, the US$453m market-cap company posted a loss of US$39m for its most recent financial year. The most pressing concern for investors is Pardes Biosciences' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Pardes Biosciences

Pardes Biosciences is bordering on breakeven, according to the 2 American Biotechs analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$575m in 2023. So, the company is predicted to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 54%, 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 Pardes Biosciences' upcoming projects, though, take into account that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we’d like to point out is that Pardes Biosciences has no debt on its balance sheet, which is quite unusual for a cash-burning 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 key fundamentals of Pardes Biosciences 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 Pardes Biosciences, take a look at Pardes Biosciences' 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 Pardes Biosciences' 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 Pardes Biosciences' 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.