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Seelos Therapeutics, Inc.'s (NASDAQ:SEEL): Seelos Therapeutics, Inc., a clinical-stage biopharmaceutical company, focuses on developing novel technologies and therapeutics for the treatment of central nervous system, respiratory, and other disorders. The US$61m market-cap posted a loss in its most recent financial year of -US$51.3m and a latest trailing-twelve-month loss of -US$20.6m shrinking the gap between loss and breakeven. The most pressing concern for investors is SEEL’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for SEEL, its year of breakeven and its implied growth rate.
According to the 2 industry analysts covering SEEL, the consensus is breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$70m in 2023. SEEL is therefore projected to breakeven around 3 years from today. In order to meet this breakeven date, I calculated the rate at which SEEL must grow year-on-year. It turns out an average annual growth rate of 73% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving SEEL’s growth isn’t the focus of this broad overview, though, keep in mind that typically pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
Before I wrap up, there’s one aspect worth mentioning. SEEL currently 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 SEEL 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.
There are key fundamentals of SEEL 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 SEEL, take a look at SEEL’s company page on Simply Wall St. I’ve also compiled a list of essential aspects you should look at:
Historical Track Record: What has SEEL'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 Seelos Therapeutics’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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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. Thank you for reading.