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Market Sentiment Around Loss-Making Medicenna Therapeutics Corp. (TSE:MDNA)

Medicenna Therapeutics Corp. (TSE:MDNA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Medicenna Therapeutics Corp., an immunotherapy company, engages in the development and commercialization of Superkines and empowered Superkines for the treatment of cancer and other diseases. The CA$89m market-cap company announced a latest loss of CA$23m on 31 March 2022 for its most recent financial year result. The most pressing concern for investors is Medicenna Therapeutics' 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 Medicenna Therapeutics

According to the 6 industry analysts covering Medicenna Therapeutics, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of CA$7.7m in 2025. So, the company is predicted to breakeven approximately 3 years from now. 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 59% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

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Given this is a high-level overview, we won’t go into details of Medicenna Therapeutics' upcoming projects, however, bear 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.

One thing we’d like to point out is that Medicenna Therapeutics has no debt on its balance sheet, which is rare for a loss-making biotech, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

This article is not intended to be a comprehensive analysis on Medicenna Therapeutics, so if you are interested in understanding the company at a deeper level, take a look at Medicenna Therapeutics' company page on Simply Wall St. We've also compiled a list of relevant factors you should further research:

  1. Historical Track Record: What has Medicenna Therapeutics' 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 Medicenna Therapeutics' 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.