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Akebia Therapeutics, Inc.'s (NASDAQ:AKBA): Akebia Therapeutics, Inc., a biopharmaceutical company, focuses on the development and commercialization of therapeutics for patients with kidney diseases. With the latest financial year loss of -US$143.6m and a trailing-twelve month of -US$192.6m, the US$532m market-cap amplifies its loss by moving further away from its breakeven target. As path to profitability is the topic on AKBA’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for AKBA’s growth and when analysts expect the company to become profitable.

View our latest analysis for Akebia Therapeutics

According to the 9 industry analysts covering AKBA, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$66m in 2021. So, AKBA is predicted to breakeven approximately 2 years from today. In order to meet this breakeven date, I calculated the rate at which AKBA must grow year-on-year. It turns out an average annual growth rate of 71% is expected, which is extremely buoyant. 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, I won’t go into details of AKBA’s upcoming projects, though, bear in mind that by and large a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before I wrap up, there’s one aspect worth mentioning. AKBA currently 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. AKBA 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:

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

1. Valuation: What is AKBA 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 AKBA 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 Akebia Therapeutics’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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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.