We can easily understand why investors are attracted to unprofitable companies. For example, while software-as-a-service company Salesforce.com has lost money for years while growing recurring revenue, you would have done very well if you had owned shares since 2005. That said, unprofitable companies are risky because they can potentially burn through all their money and fall into distress.
Given this risk, we thought we’d see if that was the case ProMIS Neuroscience (NASDAQ:PMN) shareholders should be concerned about its cash burn. In this report, we look at the company’s annual negative free cash flow and henceforth refer to it as its ‘cash burn’. First, we will determine cash runway by comparing cash burn to cash reserves.
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A company’s cash runway is calculated by dividing its cash flow by its cash burn. As of September 2025, ProMIS Neurosciences had $15 million in cash and was debt-free. Importantly, its cash burn over the last twelve months was $28 million. Therefore, it had about seven months of cash runway as of September 2025. Frankly, short runways like this put us on edge because it signals that the company needs to significantly reduce its cash burn or raise money soon. In the image below you can see how the cash balance has changed over time.
Check out our latest analysis for ProMIS Neurosciences
Since ProMIS Neurosciences is not currently generating revenue, we consider it an early-stage company. Nevertheless, we can still examine the cash burn trajectory as part of our assessment of the cash burn situation. With its cash burn rate up 24% over the past year, it appears the company is ramping up investments in the business over time. The company’s real cash runway will therefore be shorter than suggested above if expenses continue to rise. However, it is clear that the crucial factor is whether the company will grow its business in the future. So you might want to take a look at how much the company is expected to grow in the coming years.
Given its cash burn trajectory, ProMIS Neurosciences shareholders should already be thinking about how easy it could be for the company to raise even more money in the future. Generally, a publicly traded company can raise new cash by issuing stock or taking on debt. One of the main advantages of publicly traded companies is that they can sell shares to investors to raise money and finance growth. We can compare a company’s cash burn to its market capitalization to get an idea of how many new shares a company would need to issue to fund a year’s operations.
