Immunocore Holdings plc (NASDAQ:IMCR) is a biotechnology company focused on developing T cell receptor-based therapeutics. The company is part of a competitive industry where capital efficiency is crucial. In this analysis, we compare IMCR's Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC) with its peers to evaluate how well it utilizes its capital relative to its cost.
Immunocore's ROIC stands at -4.49%, while its WACC is 6.65%, resulting in a ROIC to WACC ratio of -0.675. This indicates that IMCR is not currently generating returns above its cost of capital. This is a common scenario in the biotechnology sector, where companies often face high research and development expenses without immediate revenue.
Comparing IMCR with its peers, Vor Biopharma Inc. (VOR) has a significantly lower ROIC of -232.79% and a WACC of 8.17%, leading to a ROIC to WACC ratio of -28.49. This suggests that VOR is less efficient in capital utilization compared to IMCR. Similarly, Cullinan Therapeutics, Inc. (CGEM) and Sana Biotechnology, Inc. (SANA) also show negative ROIC to WACC ratios of -11.51 and -6.34, respectively, indicating challenges in generating returns above their capital costs.
Design Therapeutics, Inc. (DSGN) stands out with the highest ROIC to WACC ratio among the peers at -3.01. Although still negative, this ratio suggests that DSGN is relatively more efficient in its capital utilization compared to the other companies in the group. This highlights the ongoing challenges faced by biotechnology companies in achieving positive returns on invested capital, especially during the early stages of product development.
