Celsion Corporation's (NASDAQ:CLSN): Celsion Corporation, a development stage oncology drug company, focuses on the development and commercialization of directed chemotherapies, DNA-mediated immunotherapy, and RNA based therapies for the treatment of cancer. With the latest financial year loss of -US$11.9m and a trailing-twelve month of -US$8.3m, the US$29m market-cap alleviates its loss by moving closer towards its target of breakeven. Many investors are wondering the rate at which CLSN 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 CLSN, its year of breakeven and its implied growth rate.
According to the 2 industry analysts covering CLSN, the consensus is breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$27m in 2022. Therefore, CLSN is expected to breakeven roughly 2 years from now. How fast will CLSN have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 60% 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.
I’m not going to go through company-specific developments for CLSN given that this is a high-level summary, but, keep in mind 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.
One thing I would like to bring into light with CLSN is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in CLSN’s case is 63%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
There are too many aspects of CLSN to cover in one brief article, but the key fundamentals for the company can all be found in one place – CLSN’s company page on Simply Wall St. I’ve also compiled a list of relevant aspects you should further research:
- Historical Track Record: What has CLSN'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 Celsion’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.
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