Oxford BioMedica PLC (OXBDF)

[georgejjl]

Oxford BioMedica PLC (LON:OXB): Is Breakeven Near?

Luis Baughman March 5, 2018

Oxford BioMedica PLC’s (LSE:OXB):

Oxford BioMedica plc, a biopharmaceutical company, researches, develops, and produces gene and cell therapy products for the treatment of ocular, neurodegenerative, and cancer diseases in Europe and rest of world. With the latest financial year loss of -UK£16.64M and a trailing-twelve month of -UK£10.60M, the UK£370.61M market-cap alleviates its loss by moving closer towards its target of breakeven. As path to profitability is the topic on OXB’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for OXB’s growth and when analysts expect the company to become profitable.

See our latest analysis for Oxford BioMedica
According to the industry analysts covering OXB, breakeven is near. They anticipate the company to incur a final loss in 2017, before generating positive profits of UK£500.00K in 2018. So, OXB is predicted to breakeven approximately a couple of months from now! How fast will OXB have to grow each year in order to reach the breakeven point by 2018? Working backwards from analyst estimates, it turns out that they expect the company to grow 78.79% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

LSE:OXB Past Future Earnings Mar 5th 18
I’m not going to go through company-specific developments for OXB given that this is a high-level summary, however, bear in mind that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before I wrap up, there’s one issue worth mentioning. OXB currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in OXB’s case, it has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:
There are key fundamentals of OXB which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at OXB, take a look at OXB’s company page on Simply Wall St. I’ve also compiled a list of relevant aspects you should look at:

Valuation: What is OXB 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 OXB 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 Oxford BioMedica’s board and the CEO’s back ground.

https://simplywall.st/stocks/gb/pharmaceuticals-biotech/lse-oxb/oxford-biomedica-shares/news/oxford-biomedica-plc-lonoxb-is-breakeven-near/

Good luck and GOD bless,

George