Ongoing Unprofitable OperationsPersistent negative profitability means the business is not yet self-sustaining and must rely on external funding or dilution. Over months to years this limits reinvestment in R&D and commercialization, raises financing risk and pressures management to achieve structural margin improvements.
Negative Operating And Free Cash FlowNegative operating and free cash flow reduce financial flexibility and shorten runway for trials and market expansion. For a small biotech, sustained cash burn forces frequent capital raises or partnering, which can delay programs, increase dilution, or constrain long-term strategic options.
Weak Returns On CapitalA negative ROE signals the company is not generating adequate returns from capital employed, reflecting structural inefficiency. Over time this undermines investor confidence, complicates capital raising and may necessitate strategic changes or reliance on partners to improve capital productivity.