Rigel Pharmaceuticals, Inc.’s (NASDAQ:RIGL): Rigel Pharmaceuticals, Inc., a biotechnology company, engages in the discovery and development of small molecule drugs for the treatment of immune and hematologic disorders, cancer, and rare diseases. With the latest financial year loss of -US$78.0m and a trailing-twelve month of -US$99.6m, the US$393m market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which RIGL will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for RIGL.
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RIGL is bordering on breakeven, according to the 6 Biotechs analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$38m in 2021. RIGL is therefore projected to breakeven around 2 years from now. What rate will RIGL 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 54%, which signals high confidence from analysts. 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 RIGL given that this is a high-level summary, however, take into account that generally 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.
One thing I’d like to point out is that RIGL has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. RIGL currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
There are key fundamentals of RIGL which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at RIGL, take a look at RIGL’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 RIGL’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 Rigel Pharmaceuticals’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.
To help readers see past 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. For errors that warrant correction please contact the editor at email@example.com.