Acceleron Pharma Inc’s (NASDAQ:XLRN) Profit Outlook

Acceleron Pharma Inc’s (NASDAQ:XLRN): Acceleron Pharma Inc., a clinical stage biopharmaceutical company, focuses on the discovery, development, and commercialization of therapeutics to treat serious and rare diseases. The company’s loss has recently broadened since it announced a -US$108.45m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$109.27m, moving it further away from breakeven. As path to profitability is the topic on XLRN’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for XLRN, its year of breakeven and its implied growth rate.

See our latest analysis for Acceleron Pharma

XLRN is bordering on breakeven, according to Biotechs analysts. They expect the company to post a final loss in -1, before turning a profit of US$0 in . XLRN is therefore projected to breakeven around a few months from now. What rate will XLRN have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 24.12%, which is extremely buoyant. If this rate turns out to be too aggressive, XLRN may become profitable much later than analysts predict.

NasdaqGM:XLRN Past Future Earnings June 22nd 18
NasdaqGM:XLRN Past Future Earnings June 22nd 18

I’m not going to go through company-specific developments for XLRN given that this is a high-level summary, but, take into account that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing I’d like to point out is that XLRN has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which usually has a high level of debt relative to its equity. This means that XLRN has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of XLRN to cover in one brief article, but the key fundamentals for the company can all be found in one place – XLRN’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should look at:

  1. Historical Track Record: What has XLRN’s 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 Acceleron Pharma’s board and the CEO’s back ground.
  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.