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Anavex Life Sciences Corp. (NASDAQ:AVXL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Anavex Life Sciences Corp., a clinical stage biopharmaceutical company, engages in the development of therapeutics for the treatment of central nervous system diseases in the United States. The company’s loss has recently broadened since it announced a US$43m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$46m, moving it further away from breakeven. The most pressing concern for investors is Anavex Life Sciences' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
See our latest analysis for Anavex Life Sciences
Consensus from 3 of the American Biotechs analysts is that Anavex Life Sciences is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$325m in 2026. So, the company is predicted to breakeven just over a year from today. 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 50%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Anavex Life Sciences' growth isn’t the focus of this broad overview, but, take into account that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before we wrap up, there’s one aspect worth mentioning. Anavex Life Sciences currently has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which usually has a high level of 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:
There are too many aspects of Anavex Life Sciences to cover in one brief article, but the key fundamentals for the company can all be found in one place – Anavex Life Sciences' company page on Simply Wall St. We've also put together a list of key aspects you should look at:
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Historical Track Record: What has Anavex Life Sciences' 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.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Anavex Life Sciences' board and the CEO’s background.
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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.