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Fennec Pharmaceuticals Inc. (NASDAQ:FENC) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Fennec Pharmaceuticals Inc., a biopharmaceutical company, develops product candidates for use in the treatment of cancer in the United States. The US$124m market-cap company posted a loss in its most recent financial year of US$18m and a latest trailing-twelve-month loss of US$16m shrinking the gap between loss and breakeven. The most pressing concern for investors is Fennec Pharmaceuticals' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Fennec Pharmaceuticals is bordering on breakeven, according to the 5 American Biotechs analysts. They expect the company to post a final loss in 2022, before turning a profit of US$38m in 2023. The company is therefore projected to breakeven around 2 years from now. 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 69% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Fennec Pharmaceuticals given that this is a high-level summary, but, take into account that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 26% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
There are too many aspects of Fennec Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Fennec Pharmaceuticals' company page on Simply Wall St. We've also put together a list of key factors you should look at:
Historical Track Record: What has Fennec Pharmaceuticals' 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.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Fennec Pharmaceuticals' board and the CEO’s background.
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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