With the business potentially at an important milestone, we thought we'd take a closer look at Verona Pharma plc's (NASDAQ:VRNA) future prospects. Verona Pharma plc, a clinical stage biopharmaceutical company, focuses on development and commercialization of therapies for the treatment of respiratory diseases with unmet medical needs. The company's loss has recently broadened since it announced a US$54m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$125m, moving it further away from breakeven. Many investors are wondering about the rate at which Verona Pharma will turn a profit, with the big question being "when will the company breakeven?" We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

According to the 5 industry analysts covering Verona Pharma, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$60m in 2026. Therefore, the company is expected to breakeven roughly 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 66% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Verona Pharma's growth isn't the focus of this broad overview, but, take into account that generally pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. 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 The company has managed its capital judiciously, with debt making up 22% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Historical Track Record: What has Verona Pharma's 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 Verona Pharma's 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.