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. operates as a biopharmaceutical company. With the latest financial year loss of US$24m and a trailing-twelve-month loss of US$26m, the US$173m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Fennec Pharmaceuticals' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Consensus from 6 of the American Biotechs analysts is that Fennec Pharmaceuticals is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$5.5m in 2024. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 65% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Fennec Pharmaceuticals' growth isn’t the focus of this broad overview, however, bear in mind that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. 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 issue worth mentioning. Fennec Pharmaceuticals currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.
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 important aspects you should look at:
Valuation: What is Fennec Pharmaceuticals 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 Fennec Pharmaceuticals 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 Fennec Pharmaceuticals’s 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.
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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.