With the business potentially at an important milestone, we thought we'd take a closer look at Iterum Therapeutics plc's (NASDAQ:ITRM) future prospects. Iterum Therapeutics plc, a clinical-stage pharmaceutical company, engages in developing and commercializing anti-infectives in Ireland, Bermuda, and the United States. With the latest financial year loss of US$38m and a trailing-twelve-month loss of US$28m, the US$20m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Iterum Therapeutics' 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.

Check out our latest analysis for Iterum Therapeutics

Expectations from some of the American Pharmaceuticals analysts is that Iterum Therapeutics is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of US$73k in 2026. So, the company is predicted to breakeven approximately 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 73%, which is extremely buoyant. 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 Iterum Therapeutics' upcoming projects, though, bear in mind that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business 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. Iterum 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. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are key fundamentals of Iterum 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 Iterum Therapeutics, take a look at Iterum Therapeutics' company page on Simply Wall St. We've also put together a list of essential factors you should look at:

1. Historical Track Record: What has Iterum Therapeutics' 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 Iterum Therapeutics' 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.