U.S. Markets close in 1 hr 45 mins
  • S&P 500

    +56.40 (+1.58%)
  • Dow 30

    +438.19 (+1.48%)
  • Nasdaq

    +152.07 (+1.28%)
  • Russell 2000

    +34.40 (+1.89%)
  • Crude Oil

    +1.73 (+4.02%)
  • Gold

    -35.20 (-1.92%)
  • Silver

    -0.40 (-1.71%)

    +0.0037 (+0.3089%)
  • 10-Yr Bond

    +0.0160 (+1.87%)
  • Vix

    -0.99 (-4.37%)

    +0.0039 (+0.2899%)

    +0.0620 (+0.0593%)

    +737.03 (+3.99%)
  • CMC Crypto 200

    +11.23 (+3.04%)
  • FTSE 100

    +98.33 (+1.55%)
  • Nikkei 225

    +638.22 (+2.50%)

When Will MediciNova Inc (NASDAQ:MNOV) Become Profitable?

Cameron Brookes

MediciNova Inc’s (NASDAQ:MNOV): MediciNova, Inc., a biopharmaceutical company, focuses on acquiring and developing novel and small molecule therapeutics for the treatment of serious diseases with unmet medical needs in the United States. The company’s loss has recently broadened since it announced a -US$11.16M loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$12.69M, moving it further away from breakeven. The most pressing concern for investors is MNOV’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for MNOV.

Check out our latest analysis for MediciNova

Expectation from analysts is MNOV is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$2.20M in 2022. So, MNOV is predicted to breakeven approximately 4 years from now. How fast will MNOV 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 -8.73% year-on-year, on average,

NasdaqGM:MNOV Past Future Earnings May 31st 18
NasdaqGM:MNOV Past Future Earnings May 31st 18

Given this is a high-level overview, I won’t go into detail the detail of MNOV’s upcoming projects, but, take into account that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. So, periods of lower growth in the upcoming years is not out of the ordinary, particularly when a company is in a period of investment.

One thing I’d like to point out is that MNOV has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which typically has high debt relative to its equity. This means that MNOV 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 MNOV, so if you are interested in understanding the company at a deeper level, take a look at MNOV’s company page on Simply Wall St. I’ve also compiled a list of essential factors you should further examine:

  1. Valuation: What is MNOV 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 MNOV is currently mispriced by the market.

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

  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.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.