Cyclacel Pharmaceuticals, Inc.'s (NASDAQ:CYCC): Cyclacel Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, develops medicines for the treatment of cancer and other proliferative diseases. The US$6.0m market-cap company announced a latest loss of -US$8.0m on 31 December 2019 for its most recent financial year result. As path to profitability is the topic on CYCC’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for CYCC, its year of breakeven and its implied growth rate.
CYCC is bordering on breakeven, according to the 2 Biotechs analysts. They expect the company to post a final loss in 2021, before turning a profit of US$85m in 2022. CYCC is therefore projected to breakeven around 2 years from now. In order to meet this breakeven date, I calculated the rate at which CYCC must grow year-on-year. It turns out an average annual growth rate of 50% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, CYCC may become profitable much later than analysts predict.
Underlying developments driving CYCC’s growth isn’t the focus of this broad overview, however, take into account that by and large 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 aspect worth mentioning. CYCC currently has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. This means that CYCC has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
There are key fundamentals of CYCC 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 CYCC, take a look at CYCC’s company page on Simply Wall St. I’ve also compiled a list of essential aspects you should further examine:
- Historical Track Record: What has CYCC'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 Cyclacel Pharmaceuticals’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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.