Intra-Cellular Therapies, Inc.'s (NASDAQ:ITCI) Path To Profitability
With the business potentially at an important milestone, we thought we'd take a closer look at Intra-Cellular Therapies, Inc.'s (NASDAQ:ITCI) future prospects. Intra-Cellular Therapies, Inc., a biopharmaceutical company, focuses on the discovery, clinical development, and commercialization of small molecule drugs that address medical needs primarily in neuropsychiatric and neurological disorders by targeting intracellular signaling mechanisms in the central nervous system (CNS) in the United States. The US$7.0b market-cap company posted a loss in its most recent financial year of US$256m and a latest trailing-twelve-month loss of US$155m shrinking the gap between loss and breakeven. As path to profitability is the topic on Intra-Cellular Therapies' 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.
Check out our latest analysis for Intra-Cellular Therapies
Consensus from 16 of the American Pharmaceuticals analysts is that Intra-Cellular Therapies is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$162m in 2025. The company is therefore projected to breakeven just over a year 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 56%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Intra-Cellular Therapies given that this is a high-level summary, however, keep in mind that generally a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing we’d like to point out is that Intra-Cellular Therapies has no debt on its balance sheet, which is rare for a loss-making pharma, which typically has high debt relative to its equity. This means that the company 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.
Next Steps:
This article is not intended to be a comprehensive analysis on Intra-Cellular Therapies, so if you are interested in understanding the company at a deeper level, take a look at Intra-Cellular Therapies' company page on Simply Wall St. We've also compiled a list of important aspects you should further examine:
Valuation: What is Intra-Cellular Therapies worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Intra-Cellular Therapies is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Intra-Cellular Therapies’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.
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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.
