- ImmunityBio’s ROIC stands at -79.59%, indicating inefficient capital utilization compared to its peers.
- The company’s ROIC to WACC ratio of -7.47 suggests a significant gap between the returns generated and the cost of capital.
- Sana Biotechnology shows the least inefficiency in capital utilization among the group, with a ROIC to WACC ratio of -4.25.
ImmunityBio, Inc. (NASDAQ:IBRX) is a biotechnology company focused on developing innovative therapies to treat cancer and infectious diseases. The company aims to harness the power of the immune system to combat these diseases. In the competitive landscape, ImmunityBio faces competition from other biotech firms like BridgeBio Pharma, Sana Biotechnology, Nkarta, Allogene Therapeutics, and Recursion Pharmaceuticals.
In evaluating ImmunityBio’s financial performance, the Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC) are crucial metrics. ImmunityBio’s ROIC stands at -79.59%, while its WACC is 10.65%. This results in a ROIC to WACC ratio of -7.47, indicating a significant gap between the returns generated and the cost of capital. This suggests that ImmunityBio is not efficiently using its capital to generate returns.
Comparatively, BridgeBio Pharma has a ROIC of -72.24% and a WACC of 8.98%, leading to a ROIC to WACC ratio of -8.04. Although BridgeBio’s ratio is slightly worse than ImmunityBio’s, both companies are struggling to generate returns above their cost of capital. This highlights the challenges faced by biotech firms in achieving profitability.
Sana Biotechnology, with a ROIC of -49.99% and a WACC of 11.76%, has the highest ROIC to WACC ratio among the peers at -4.25. This indicates that Sana is relatively closer to breaking even compared to its peers, despite still generating returns below its cost of capital. This positions Sana as the least inefficient in capital utilization among the group.
Nkarta and Allogene Therapeutics also show negative ROIC to WACC ratios of -4.93 and -11.26, respectively. While Nkarta’s ratio is better than ImmunityBio’s, Allogene’s is worse, indicating varying levels of capital efficiency among these biotech companies. Recursion Pharmaceuticals, with a ratio of -7.03, is slightly better than ImmunityBio, but still faces challenges in capital utilization.
