La Jolla Pharmaceutical Company (NASDAQ:LJPC) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. La Jolla Pharmaceutical Company engages in the development and commercialization of therapies that improve outcomes in patients suffering from life-threatening diseases. The US$104m market-cap company posted a loss in its most recent financial year of US$39m and a latest trailing-twelve-month loss of US$16m shrinking the gap between loss and breakeven. The most pressing concern for investors is La Jolla Pharmaceutical's 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.

View our latest analysis for La Jolla Pharmaceutical

Consensus from 2 of the American Biotechs analysts is that La Jolla Pharmaceutical is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of US$9.9m in 2021. Therefore, the company is expected to breakeven roughly 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 53%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving La Jolla Pharmaceutical's growth isn’t the focus of this broad overview, but, take into account that typically 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.

One thing we would like to bring into light with La Jolla Pharmaceutical is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

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