We feel now is a pretty good time to analyse Anavex Life Sciences Corp.'s (NASDAQ:AVXL) business as it appears the company may be on the cusp of a considerable accomplishment. Anavex Life Sciences Corp., a clinical stage biopharmaceutical company, engages in the development of drug candidates for the treatment of central nervous system (CNS) diseases. The company’s loss has recently broadened since it announced a US$38m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$45m, moving it further away from breakeven. As path to profitability is the topic on Anavex Life Sciences' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Anavex Life Sciences is bordering on breakeven, according to the 4 American Biotechs analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$134m in 2025. Therefore, the company is expected to breakeven roughly 3 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 57%, which signals high confidence from analysts. 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, we won’t go into details of Anavex Life Sciences' upcoming projects, though, keep in mind that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing we’d like to point out is that Anavex Life Sciences has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high 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.
There are key fundamentals of Anavex Life Sciences which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Anavex Life Sciences, take a look at Anavex Life Sciences' company page on Simply Wall St. We've also compiled a list of key aspects you should look at:
Historical Track Record: What has Anavex Life Sciences' 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 Anavex Life Sciences' 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.
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