Companies Like D&D Pharmatech (KOSDAQ:347850) Are In A Position To Invest In Growth
There's no doubt that money can be made by owning shares of unprofitable businesses. By way of example, D&D Pharmatech (KOSDAQ:347850) has seen its share price rise 641% over the last year, delighting many shareholders. But while the successes are well known, investors should not ignore the very many unprofitable companies that simply burn through all their cash and collapse.
So notwithstanding the buoyant share price, we think it's well worth asking whether D&D Pharmatech's cash burn is too risky. In this report, we will consider the company's annual negative free cash flow, henceforth referring to it as the 'cash burn'. Let's start with an examination of the business' cash, relative to its cash burn.
When Might D&D Pharmatech Run Out Of Money?
A company's cash runway is the amount of time it would take to burn through its cash reserves at its current cash burn rate. When D&D Pharmatech last reported its September 2025 balance sheet in November 2025, it had zero debt and cash worth ₩38b. Looking at the last year, the company burnt through ₩24b. So it had a cash runway of approximately 19 months from September 2025. That's not too bad, but it's fair to say the end of the cash runway is in sight, unless cash burn reduces drastically. Depicted below, you can see how its cash holdings have changed over time.
Check out our latest analysis for D&D Pharmatech
How Well Is D&D Pharmatech Growing?
D&D Pharmatech boosted investment sharply in the last year, with cash burn ramping by 54%. While operating revenue was up over the same period, the 2.2% gain gives us scant comfort. Taken together, we think these growth metrics are a little worrying. In reality, this article only makes a short study of the company's growth data. This graph of historic earnings and revenue shows how D&D Pharmatech is building its business over time.
Can D&D Pharmatech Raise More Cash Easily?
D&D Pharmatech seems to be in a fairly good position, in terms of cash burn, but we still think it's worthwhile considering how easily it could raise more money if it wanted to. Generally speaking, a listed business can raise new cash through issuing shares or taking on debt. One of the main advantages held by publicly listed companies is that they can sell shares to investors to raise cash and fund growth. By comparing a company's annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate).
D&D Pharmatech has a market capitalisation of ₩3.8t and burnt through ₩24b last year, which is 0.6% of the company's market value. That means it could easily issue a few shares to fund more growth, and might well be in a position to borrow cheaply.
How Risky Is D&D Pharmatech's Cash Burn Situation?
On this analysis of D&D Pharmatech's cash burn, we think its cash burn relative to its market cap was reassuring, while its increasing cash burn has us a bit worried. Cash burning companies are always on the riskier side of things, but after considering all of the factors discussed in this short piece, we're not too worried about its rate of cash burn. An in-depth examination of risks revealed 1 warning sign for D&D Pharmatech that readers should think about before committing capital to this stock.
If you would prefer to check out another company with better fundamentals, then do not miss this free list of interesting companies, that have HIGH return on equity and low debt or this list of stocks which are all forecast to grow.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.