When Can We Expect A Profit From Scilex Holding Company (NASDAQ:SCLX)?

With the business potentially at an important milestone, we thought we'd take a closer look at Scilex Holding Company's (NASDAQ:SCLX) future prospects. Scilex Holding Company focuses on acquiring, developing, and commercializing non-opioid pain management products for the treatment of acute and chronic pain. With the latest financial year loss of US$73m and a trailing-twelve-month loss of US$123m, the US$97m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Scilex Holding's 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.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Scilex Holding is bordering on breakeven, according to some American Pharmaceuticals analysts. They expect the company to post a final loss in 2025, before turning a profit of US$137m in 2026. The company is therefore projected 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 56%, which is rather optimistic! 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 Scilex Holding's upcoming projects, though, take into account 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.

View our latest analysis for Scilex Holding

Before we wrap up, there’s one issue worth mentioning. Scilex Holding currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are key fundamentals of Scilex Holding 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 Scilex Holding, take a look at Scilex Holding's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further research:

1. Valuation: What is Scilex Holding 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 Scilex Holding 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 Scilex Holding’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.