We're Hopeful That NewAmsterdam Pharma (NASDAQ:NAMS) Will Use Its Cash Wisely

Even when a business is losing money, it's possible for shareholders to make money if they buy a good business at the right price. For example, although Amazon.com made losses for many years after listing, if you had bought and held the shares since 1999, you would have made a fortune. But while history lauds those rare successes, those that fail are often forgotten; who remembers Pets.com? So, the natural question for NewAmsterdam Pharma (NASDAQ:NAMS) shareholders is whether they should be concerned by its rate of cash burn. In this article, we define cash burn as its annual (negative) free cash flow, which is the amount of money a company spends each year to fund its growth. We'll start by comparing its cash burn with its cash reserves in order to calculate its cash runway. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. How Long Is NewAmsterdam Pharma's Cash Runway? A cash runway is defined as the length of time it would take a company to run out of money if it kept spending at its current rate of cash burn. When NewAmsterdam Pharma last reported its September 2025 balance sheet in November 2025, it had zero debt and cash worth US$703m. Importantly, its cash burn was US$145m over the trailing twelve months. That means it had a cash runway of about 4.9 years as of September 2025. Notably, however, analysts think that NewAmsterdam Pharma will break even (at a free cash flow level) before then. In that case, it may never reach the end of its cash runway. You can see how its cash balance has changed over time in the image below. NasdaqGM:NAMS Debt to Equity History December 24th 2025 Check out our latest analysis for NewAmsterdam Pharma How Well Is NewAmsterdam Pharma Growing? NewAmsterdam Pharma reduced its cash burn by 6.6% during the last year, which points to some degree of discipline. And operating revenue was up by 4.9% too. In light of the data above, we're fairly sanguine about the business growth trajectory. Clearly, however, the crucial factor is whether the company will grow its business going forward. For that reason, it makes a lot of sense to take a look at our analyst forecasts for the company. How Easily Can NewAmsterdam Pharma Raise Cash? There's no doubt NewAmsterdam Pharma seems to be in a fairly good position, when it comes to managing its cash burn, but even if it's only hypothetical, it's always worth asking how easily it could raise more money to fund growth. Issuing new shares, or taking on debt, are the most common ways for a listed company to raise more money for its business. Many companies end up issuing new shares to fund future growth. We can compare a company's cash burn to its market capitalisation to get a sense for how many new shares a company would have to issue to fund one year's operations. NewAmsterdam Pharma has a market capitalisation of US$4.1b and burnt through US$145m last year, which is 3.5% of the company's market value. That's a low proportion, so we figure the company would be able to raise more cash to fund growth, with a little dilution, or even to simply borrow some money. How Risky Is NewAmsterdam Pharma's Cash Burn Situation? It may already be apparent to you that we're relatively comfortable with the way NewAmsterdam Pharma is burning through its cash. In particular, we think its cash runway stands out as evidence that the company is well on top of its spending. On this analysis its cash burn reduction was its weakest feature, but we are not concerned about it. One real positive is that analysts are forecasting that the company will reach breakeven. Looking at all the measures in this article, together, we're not worried about its rate of cash burn; the company seems well on top of its medium-term spending needs. Taking an in-depth view of risks, we've identified 1 warning sign for NewAmsterdam Pharma that you should be aware of before investing. Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies with significant insider holdings, and this list of stocks growth stocks (according to analyst forecasts) Mobile Infrastructure for Defense and DisasterThe next wave in robotics isn't humanoid. Its fully autonomous towers delivering 5G, ISR, and radar in under 30 minutes, anywhere.Get the investor briefing before the next round of contractsSponsored On Behalf of CiTech