Novelion Therapeutics Inc’s (NASDAQ:NVLN): Novelion Therapeutics Inc., a biopharmaceutical company, develops a portfolio of therapies for individuals living with rare diseases in the United States, Brazil, and internationally. With the latest financial year loss of -US$126.71M and a trailing-twelve month of -US$128.58M, the US$82.86M market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which NVLN will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for NVLN, its year of breakeven and its implied growth rate.
According to the industry analysts covering NVLN, breakeven is near. They anticipate the company to incur a final loss in 2018, before generating positive profits of US$2.20M in 2019. NVLN is therefore projected to breakeven around a few months from now. How fast will NVLN have to grow each year in order to reach the breakeven point by 2019? Working backwards from analyst estimates, it turns out that they expect the company to grow 138.17% year-on-year, on average, 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 detail the detail of NVLN’s upcoming projects, though, take into account that generally 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 I wrap up, there’s one issue worth mentioning. NVLN 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. These losses tend to occur only on paper, however, in other cases it can be forewarning.
There are key fundamentals of NVLN which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at NVLN, take a look at NVLN’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should look at:
- Historical Track Record: What has NVLN’s 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 Novelion Therapeutics’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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.