We feel now is a pretty good time to analyse Intra-Cellular Therapies, Inc.'s (NASDAQ:ITCI) business as it appears the company may be on the cusp of a considerable accomplishment. Intra-Cellular Therapies, Inc., a biopharmaceutical company, develops novel drugs for the treatment of neuropsychiatric and neurologic diseases by targeting intracellular signaling mechanisms within the central nervous system in the United States. The US$4.5b market-cap company posted a loss in its most recent financial year of US$284m and a latest trailing-twelve-month loss of US$321m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Intra-Cellular Therapies' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Consensus from 12 of the American Pharmaceuticals analysts is that Intra-Cellular Therapies is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$32m in 2024. Therefore, the company is expected to breakeven roughly 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 75% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Intra-Cellular Therapies given that this is a high-level summary, but, keep in mind that generally a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business 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’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 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 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 compiled a list of key factors you should look at:
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.
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