We’re Keeping An Eye On Cocrystal Pharma’s (NASDAQ:COCP) Cash Burn Rate

Just because a business does not make any money, does not mean that the stock will go down. 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. Nonetheless, only a fool would ignore the risk that a loss making company burns through its cash too quickly.

So, the natural question for Cocrystal Pharma (NASDAQ:COCP) shareholders is whether they should be concerned by its rate of cash burn. For the purposes of this article, cash burn is the annual rate at which an unprofitable company spends cash to fund its growth; its negative free cash flow. The first step is to compare its cash burn with its cash reserves, to give us its ‘cash runway’.

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You can calculate a company’s cash runway by dividing the amount of cash it has by the rate at which it is spending that cash. In December 2025, Cocrystal Pharma had US$7.0m in cash, and was debt-free. Importantly, its cash burn was US$8.2m over the trailing twelve months. That means it had a cash runway of around 10 months as of December 2025. To be frank, this kind of short runway puts us on edge, as it indicates the company must reduce its cash burn significantly, or else raise cash imminently. Depicted below, you can see how its cash holdings have changed over time.

Check out our latest analysis for Cocrystal Pharma

Cocrystal Pharma didn’t record any revenue over the last year, indicating that it’s an early stage company still developing its business. Nonetheless, we can still examine its cash burn trajectory as part of our assessment of its cash burn situation. Given the length of the cash runway, we’d interpret the 50% reduction in cash burn, in twelve months, as prudent if not necessary for capital preservation. 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.

While we’re comforted by the recent reduction evident from our analysis of Cocrystal Pharma’s cash burn, it is still worth considering how easily the company could raise more funds, if it wanted to accelerate spending to drive growth. Generally speaking, a listed business can raise new cash through issuing shares or taking on debt. Commonly, a business will sell new shares in itself to raise cash and drive 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.

Cocrystal Pharma has a market capitalisation of US$21m and burnt through US$8.2m last year, which is 39% of the company’s market value. That’s fairly notable cash burn, so if the company had to sell shares to cover the cost of another year’s operations, shareholders would suffer some costly dilution.

Even though its cash burn relative to its market cap makes us a little nervous, we are compelled to mention that we thought Cocrystal Pharma’s cash burn reduction was relatively promising. Summing up, we think the Cocrystal Pharma’s cash burn is a risk, based on the factors we mentioned in this article. Taking a deeper dive, we’ve spotted 7 warning signs for Cocrystal Pharma you should be aware of, and 4 of them can’t be ignored.

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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.