MEI Pharma, Inc. (NASDAQ:MEIP) Is Expected To Breakeven In The Near Future

·3 min read

MEI Pharma, Inc. (NASDAQ:MEIP) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. MEI Pharma, Inc., a late-stage pharmaceutical company, focuses on the development and commercialization of various therapies for the treatment of cancer. On 30 June 2021, the US$309m market-cap company posted a loss of US$51m for its most recent financial year. As path to profitability is the topic on MEI Pharma's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for MEI Pharma

Consensus from 7 of the American Biotechs analysts is that MEI Pharma is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$8.4m in 2024. Therefore, the company is expected to breakeven roughly 3 years from today. 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 63% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for MEI Pharma given that this is a high-level summary, though, 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 we’d like to point out is that MEI Pharma 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. The company 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 MEI Pharma to cover in one brief article, but the key fundamentals for the company can all be found in one place – MEI Pharma's company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:

  1. Valuation: What is MEI Pharma 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 MEI Pharma 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 MEI Pharma’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.

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.

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