Anavex Life Sciences Corp. (NASDAQ:AVXL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Anavex Life Sciences Corp., a clinical stage biopharmaceutical company, engages in the development of therapeutics for the treatment of central nervous system diseases. The US$619m market-cap company's loss lessened since it announced a US$48m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$42m, as it approaches breakeven. The most pressing concern for investors is Anavex Life Sciences' path to profitability – when will it 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 3 industry analysts covering Anavex Life Sciences, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$80m in 2025. So, the company is predicted to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 48%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Anavex Life Sciences given that this is a high-level summary, however, take into account that typically biotechs, 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 Anavex Life Sciences has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which typically has high 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 Anavex Life Sciences, so if you are interested in understanding the company at a deeper level, take a look at Anavex Life Sciences' company page on Simply Wall St. We've also put together a list of important aspects you should look at:

1. Valuation: What is Anavex Life Sciences 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 Anavex Life Sciences is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Anavex Life Sciences'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.