There’s no doubt that money can be made by owning shares of 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.
That should be the case ImageBio (NASDAQ:IMA) Should Shareholders Be Worried About Cash Burn? For the purposes of this article, we’ll define cash burn as the amount of money the company spends each year to finance its growth (also called negative free cash flow). Let’s start with an examination of the company’s cash flows, relative to its cash burn.
This technology could replace computers: discover the twenty stocks working to make quantum computing a reality.
A company’s cash runway is calculated by dividing its cash flow by its cash burn. When ImageneBio last reported its September 2025 balance sheet in November 2025, it had no debt and cash of US$103 million. Looking at the last year, the company burned through $44 million. So as of September 2025, it had a cash runway of about 2.3 years. That is undoubtedly a sensible and sensible runway length. Below you can see how cash positions have changed over time.
Check out our latest analysis for ImageneBio
In our view, ImageneBio is not yet generating significant operating income, as it reported just $800,000 in the last twelve months. As a result, we think it’s still a bit early to focus on revenue growth, so we’ll limit ourselves to looking at how cash burn is changing over time. The sky-high cash flow, increasing 114% year on year, certainly tests our nerves. To be fair, these types of increases cannot be sustained for long without putting pressure on the balance sheet. However, it is clear that the crucial factor is whether the company will grow its business in the future. For that reason, it makes sense to look at our analyst forecasts for the company.
While ImageneBio has solid cash flow, its cash burn trajectory may prompt some shareholders to think ahead about when the company might need to raise more money. Issuing new shares or taking on debt are the most common ways a publicly traded company can raise more money for its operations. Typically, a company will sell new shares on its own to raise money and fuel growth. By comparing a company’s annual cash burn to its total market capitalization, we can roughly estimate how many shares it would need to issue to keep the company going for another year (at the same burn rate).
