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Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Aurinia Pharmaceuticals Inc., a biopharmaceutical company, develops and commercializes therapies to treat various diseases with unmet medical need in Japan and China. The company’s loss has recently broadened since it announced a US$103m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$148m, moving it further away from breakeven. Many investors are wondering about the rate at which Aurinia Pharmaceuticals will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Aurinia Pharmaceuticals is bordering on breakeven, according to the 9 American Biotechs analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$113m in 2023. Therefore, the company is expected to breakeven roughly 2 years 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 74% 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 Aurinia Pharmaceuticals' growth isn’t the focus of this broad overview, however, keep in mind that typically 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.
Before we wrap up, there’s one aspect worth mentioning. Aurinia Pharmaceuticals 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.
There are key fundamentals of Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals, take a look at Aurinia Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of pertinent factors you should further research:
Valuation: What is Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals’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.
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.
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