We feel now is a pretty good time to analyse Anavex Life Sciences Corp.'s (NASDAQ:AVXL) business as it appears the company may be on the cusp of a considerable accomplishment. Anavex Life Sciences Corp., a clinical stage biopharmaceutical company, engages in the development of drug candidates for the treatment of central nervous system (CNS) diseases. On 30 September 2022, the US$886m market-cap company posted a loss of US$48m for its most recent financial year. The most pressing concern for investors is Anavex Life Sciences' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts' expectations for the company.

Check out our latest analysis for Anavex Life Sciences

According to the 3 industry analysts covering Anavex Life Sciences, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$134m in 2025. So, the company is predicted to breakeven approximately 2 years from now. 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 53%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won't go into details of Anavex Life Sciences' upcoming projects, however, bear in mind that by and large 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. Anavex Life Sciences currently has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which typically has high 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:

This article is not intended to be a comprehensive analysis on Anavex Life Sciences, so if you are interested in understanding the company at a deeper level, take a look at Anavex Life Sciences' company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:

1. 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.
2. 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.
3. 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.