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We feel now is a pretty good time to analyse Heron Therapeutics, Inc.'s (NASDAQ:HRTX) business as it appears the company may be on the cusp of a considerable accomplishment. Heron Therapeutics, Inc., a commercial-stage biotechnology company, focuses on enhancing the lives of patients by developing and commercializing therapeutic that enhances medical care. With the latest financial year loss of US$111m and a trailing-twelve-month loss of US$48m, the US$302m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Heron Therapeutics' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Heron Therapeutics
Consensus from 4 of the American Biotechs analysts is that Heron Therapeutics is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$817k in 2025. Therefore, the company is expected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 69% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Heron Therapeutics given that this is a high-level summary, however, bear in mind 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 that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing we would like to bring into light with Heron Therapeutics is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.
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There are key fundamentals of Heron Therapeutics which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Heron Therapeutics, take a look at Heron Therapeutics' company page on Simply Wall St. We've also put together a list of relevant factors you should look at: