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Chiasma, Inc. (NASDAQ:CHMA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Chiasma, Inc., a commercial-stage biopharmaceutical company, focuses on developing and commercializing oral medications using transient permeability enhancer technology platform for the treatment of rare and serious chronic disease worldwide. The US$240m market-cap company posted a loss in its most recent financial year of US$75m and a latest trailing-twelve-month loss of US$90m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Chiasma will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Consensus from 5 of the American Pharmaceuticals analysts is that Chiasma is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$16m in 2023. So, the company is predicted to breakeven approximately 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 68% is expected, which is rather optimistic! 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 Chiasma's upcoming projects, however, keep in mind that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business 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 Chiasma has no debt on its balance sheet, which is rare for a loss-making pharma, 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 Chiasma 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 Chiasma, take a look at Chiasma's company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:
Historical Track Record: What has Chiasma'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 Chiasma'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.
This article by Simply Wall St is general in nature. 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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