When Will Botanix Pharmaceuticals Limited (ASX:BOT) Breakeven?
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Botanix Pharmaceuticals Limited's (ASX:BOT): Botanix Pharmaceuticals Limited, a clinical stage medical dermatology company, develops therapeutics for the treatment of serious skin diseases in Australia. The AU$77m market-cap posted a loss in its most recent financial year of -AU$11.0m and a latest trailing-twelve-month loss of -AU$12.8m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is BOT’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for BOT.
Check out our latest analysis for Botanix Pharmaceuticals
According to the industry analysts covering BOT, breakeven is near. They anticipate the company to incur a final loss in 2019, before generating positive profits of AU$10m in 2020. Therefore, BOT is expected to breakeven roughly a couple of months from now! How fast will BOT have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 91% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for BOT given that this is a high-level summary, however, keep in mind that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. 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 BOT has no debt on its balance sheet, which is rare for a loss-making biotech, which usually has a high level of debt relative to its equity. BOT 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:
This article is not intended to be a comprehensive analysis on BOT, so if you are interested in understanding the company at a deeper level, take a look at BOT’s company page on Simply Wall St. I’ve also put together a list of important factors you should look at:
Valuation: What is BOT 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 BOT is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Botanix Pharmaceuticals’s board and the CEO’s back ground.
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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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
