With the business potentially at an important milestone, we thought we'd take a closer look at Kazia Therapeutics Limited's (ASX:KZA) future prospects. Kazia Therapeutics Limited, an oncology-focused biotechnology company, develops anti-cancer drugs. With the latest financial year loss of AU$12m and a trailing-twelve-month loss of AU$13m, the AU$164m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Kazia Therapeutics 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.

See our latest analysis for Kazia Therapeutics

According to the 2 industry analysts covering Kazia Therapeutics, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$26m in 2023. Therefore, the company is expected to breakeven roughly 2 years from now. 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 82%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Kazia Therapeutics' growth isn’t the focus of this broad overview, 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 aspect worth mentioning. Kazia Therapeutics currently has no debt on its balance sheet, which is quite unusual for a cash-burning 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:

There are key fundamentals of Kazia Therapeutics which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Kazia Therapeutics, take a look at Kazia Therapeutics' company page on Simply Wall St. We've also compiled a list of key factors you should further examine:

1. Valuation: What is Kazia 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 Kazia 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 Kazia 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.

This article by Simply Wall St is general in nature. 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.

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