Will Tonix Pharmaceuticals Holding (NASDAQ:TNXP) Spend Its Cash Wisely?

There's no doubt that money can be made by owning shares of unprofitable businesses. For example, although Amazon.com made losses for many years after listing, if you had bought and held the shares since 1999, you would have made a fortune. But while the successes are well known, investors should not ignore the very many unprofitable companies that simply burn through all their cash and collapse.

Given this risk, we thought we'd take a look at whether Tonix Pharmaceuticals Holding (NASDAQ:TNXP) shareholders should be worried about its cash burn. For the purpose of this article, we'll define cash burn as the amount of cash the company is spending each year to fund its growth (also called its negative free cash flow). First, we'll determine its cash runway by comparing its cash burn with its cash reserves.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

How Long Is Tonix Pharmaceuticals Holding's Cash Runway?

A cash runway is defined as the length of time it would take a company to run out of money if it kept spending at its current rate of cash burn. When Tonix Pharmaceuticals Holding last reported its September 2025 balance sheet in November 2025, it had zero debt and cash worth US$190m. Importantly, its cash burn was US$76m over the trailing twelve months. That means it had a cash runway of about 2.5 years as of September 2025. That's decent, giving the company a couple years to develop its business. Depicted below, you can see how its cash holdings have changed over time.

Check out our latest analysis for Tonix Pharmaceuticals Holding

How Well Is Tonix Pharmaceuticals Holding Growing?

Some investors might find it troubling that Tonix Pharmaceuticals Holding is actually increasing its cash burn, which is up 10% in the last year. And we must say we find it concerning that operating revenue dropped 8.8% over the same period. Considering both these factors, we're not particularly excited by its growth profile. Clearly, however, the crucial factor is whether the company will grow its business going forward. So you might want to take a peek at how much the company is expected to grow in the next few years.

How Easily Can Tonix Pharmaceuticals Holding Raise Cash?

Tonix Pharmaceuticals Holding seems to be in a fairly good position, in terms of cash burn, but we still think it's worthwhile considering how easily it could raise more money if it wanted to. Generally speaking, a listed business can raise new cash through issuing shares or taking on debt. One of the main advantages held by publicly listed companies is that they can sell shares to investors to raise cash and fund growth. By looking at a company's cash burn relative to its market capitalisation, we gain insight on how much shareholders would be diluted if the company needed to raise enough cash to cover another year's cash burn.

Tonix Pharmaceuticals Holding's cash burn of US$76m is about 41% of its US$188m market capitalisation. That's high expenditure relative to the value of the entire company, so if it does have to issue shares to fund more growth, that could end up really hurting shareholders returns (through significant dilution).

How Risky Is Tonix Pharmaceuticals Holding's Cash Burn Situation?

On this analysis of Tonix Pharmaceuticals Holding's cash burn, we think its cash runway was reassuring, while its cash burn relative to its market cap has us a bit worried. We don't think its cash burn is particularly problematic, but after considering the range of factors in this article, we do think shareholders should be monitoring how it changes over time. On another note, Tonix Pharmaceuticals Holding has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies with significant insider holdings, and this list of stocks growth stocks (according to analyst forecasts)

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.