Heron Therapeutics, Inc. (NASDAQ:HRTX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Heron Therapeutics, Inc., a commercial-stage biotechnology company, focuses on enhancing the lives of patients by developing and commercializing therapeutic that enhances medical care. The US$499m market-cap company posted a loss in its most recent financial year of US$111m and a latest trailing-twelve-month loss of US$81m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Heron Therapeutics will turn a profit, with the big question being "when will the company breakeven?" Below we will provide a high-level summary of the industry analysts' expectations for the company.

Consensus from 4 of the American Biotechs analysts is that Heron Therapeutics is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$1.4m in 2025. Therefore, the company is expected 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 69%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won't go into details of Heron Therapeutics' upcoming projects, however, take into account that by and large a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there's one issue worth mentioning. Heron Therapeutics currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

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

1. Valuation: What is Heron Therapeutics 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 Heron Therapeutics 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 Heron Therapeutics'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.

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