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When Will Idera Pharmaceuticals, Inc. (NASDAQ:IDRA) Become Profitable?

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Idera Pharmaceuticals, Inc. (NASDAQ:IDRA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Idera Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, focuses on the discovery, development, and commercialization of drugs for oncology and rare disease indications in the United States. The US$176m market-cap company announced a latest loss of US$113m on 31 December 2020 for its most recent financial year result. Many investors are wondering about the rate at which Idera Pharmaceuticals 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.

Check out our latest analysis for Idera Pharmaceuticals

Idera Pharmaceuticals is bordering on breakeven, according to the 5 American Biotechs analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$6.7m in 2023. So, the company is predicted to breakeven approximately 2 years from today. 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 72% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Idera Pharmaceuticals' growth isn’t the focus of this broad overview, but, take into account that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company 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 would like to bring into light with Idera Pharmaceuticals is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

This article is not intended to be a comprehensive analysis on Idera Pharmaceuticals, so if you are interested in understanding the company at a deeper level, take a look at Idera Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further research:

  1. Historical Track Record: What has Idera Pharmaceuticals' 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.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Idera Pharmaceuticals' board and the CEO’s background.

  3. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.