We feel now is a pretty good time to analyse Advicenne S.A.’s (EPA:ADVIC) business as it appears the company may be on the cusp of a considerable accomplishment. Advicenne S.A., a late-stage biopharmaceutical company, develops pediatric therapeutics for the treatment of orphan renal diseases and niche neurology indications. The company’s loss has recently broadened since it announced a €14m loss in the full financial year, compared to the latest trailing-twelve-month loss of €15m, moving it further away from breakeven. The most pressing concern for investors is Advicenne’s path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Advicenne
Advicenne is bordering on breakeven, according to the 2 French Pharmaceuticals analysts. They expect the company to post a final loss in 2020, before turning a profit of €5.3m in 2021. So, the company is predicted 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 100% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Advicenne’s growth isn’t the focus of this broad overview, however, bear in mind that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing we would like to bring into light with Advicenne is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Advicenne’s case is 83%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
There are key fundamentals of Advicenne 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 Advicenne, take a look at Advicenne’s company page on Simply Wall St. We’ve also put together a list of relevant factors you should further research:
- Valuation: What is Advicenne 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 Advicenne is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Advicenne’s board and the CEO’s background.
- 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.
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