With the business potentially at an important milestone, we thought we'd take a closer look at Intra-Cellular Therapies, Inc.'s (NASDAQ:ITCI) future prospects. Intra-Cellular Therapies, Inc., a biopharmaceutical company, focuses on the discovery, clinical development, and commercialization of small molecule drugs that address medical needs primarily in neuropsychiatric and neurological disorders by targeting intracellular signaling mechanisms in the central nervous system (CNS) in the United States. The US$6.6b market-cap company announced a latest loss of US$140m on 31 December 2023 for its most recent financial year result. As path to profitability is the topic on Intra-Cellular Therapies' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
According to the 17 industry analysts covering Intra-Cellular Therapies, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$116m in 2025. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 57% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Intra-Cellular Therapies' growth isn't the focus of this broad overview, but, take into account that by and large 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'd like to point out is that Intra-Cellular Therapies has no debt on its balance sheet, which is quite unusual for a cash-burning pharma, 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:
There are key fundamentals of Intra-Cellular Therapies 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 Intra-Cellular Therapies, take a look at Intra-Cellular Therapies' company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:
- Valuation: What is Intra-Cellular Therapies 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 Intra-Cellular Therapies 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 Intra-Cellular Therapies'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. 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.