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. The US$38m market-cap posted a loss in its most recent financial year of -US$11.9m and a latest trailing-twelve-month loss of -US$7.4m shrinking the gap between loss and breakeven. As path to profitability is the topic on CLSN’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for CLSN.
According to the 2 industry analysts covering CLSN, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$26m in 2022. CLSN is therefore projected to breakeven around 3 years from now. What rate will CLSN have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 72%, 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, I won’t go into details of CLSN’s upcoming projects, however, bear in mind that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one issue worth mentioning. CLSN currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in CLSN’s case is 51%. A higher level of debt requires more stringent capital management which 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 put together a list of relevant factors you should look at:
- 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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