Sesen Bio, Inc. (NASDAQ:SESN): Is Breakeven Near?

By
Simply Wall St
Published
July 23, 2021
NasdaqGM:SESN
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Sesen Bio, Inc. (NASDAQ:SESN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Sesen Bio, Inc., a late-stage clinical company, focuses on designing, engineering, developing, and commercializing targeted fusion protein therapeutics (TFPTs) for the treatment patients with cancer. The company’s loss has recently broadened since it announced a US$23m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$112m, moving it further away from breakeven. The most pressing concern for investors is Sesen Bio's path to profitability – when will it breakeven? 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 Sesen Bio

Sesen Bio is bordering on breakeven, according to the 3 American Biotechs analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$31m in 2023. So, the company is predicted to breakeven approximately 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 70% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
NasdaqGM:SESN Earnings Per Share Growth July 23rd 2021

We're not going to go through company-specific developments for Sesen Bio given that this is a high-level summary, however, 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.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 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 Sesen Bio, so if you are interested in understanding the company at a deeper level, take a look at Sesen Bio's company page on Simply Wall St. We've also compiled a list of essential factors you should look at:

  1. Valuation: What is Sesen Bio 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 Sesen Bio 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 Sesen Bio’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. 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.
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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.