Leap Therapeutics and Pharmaxis, both small-cap biopharmaceutical companies, are under scrutiny as investors seek to determine which firm offers superior business prospects. This article evaluates their performance based on several factors, including profitability, valuation, risk, and institutional ownership, providing a clear picture of their respective positions in the market.
Profitability and Valuation
Profitability is a critical measure when comparing Leap Therapeutics and Pharmaxis. For the most recent fiscal periods, Pharmaxis reported higher net margins, return on equity, and return on assets compared to Leap Therapeutics. Specifically, Pharmaxis has consistently demonstrated stronger earnings and revenue figures, indicating a more robust financial performance.
The revenue comparison reveals that Pharmaxis outperforms Leap Therapeutics significantly. While Leap Therapeutics focuses on developing therapies for cancer treatment, Pharmaxis has a diverse portfolio that includes products aimed at treating fibrotic and inflammatory diseases. This diversity in offerings is reflected in their financial results, further solidifying Pharmaxis’s stronger market position.
Risk Assessment and Analyst Recommendations
When evaluating risk, Leap Therapeutics presents a notably lower volatility profile. Its beta stands at -0.06, suggesting that its share price is 106% less volatile than the S&P 500 index. In contrast, Pharmaxis has a beta of 1.22, indicating that its share price is 22% more volatile than the market average. This distinction highlights Leap’s stability, which may appeal to risk-averse investors.
Analyst ratings also provide insight into investor sentiment. According to data from MarketBeat.com, Leap Therapeutics has garnered mixed reviews, while Pharmaxis has received more favorable ratings from analysts. This trend may influence investment decisions, particularly among institutional investors.
Institutional ownership is another critical factor. Approximately 30.5% of Leap Therapeutics shares are held by institutional investors, suggesting confidence in its long-term potential. Conversely, only 4.3% of shares are held by insiders. Strong institutional ownership can indicate a belief among large investors that a stock is poised for growth.
In summary, Pharmaxis outperforms Leap Therapeutics on five out of eight critical factors analyzed, including profitability, revenue, and analyst recommendations.
Company Profiles
Leap Therapeutics, Inc. focuses on acquiring and developing innovative therapies for cancer treatment. Its lead product, DKN-01, is a monoclonal antibody targeting Dickkopf-related protein 1 and is currently in multiple clinical trials for various cancer types, including esophagogastric and prostate cancer. The company, which rebranded from HealthCare Pharmaceuticals, Inc. in November 2015, was incorporated in 2011 and is headquartered in Cambridge, Massachusetts.
On the other hand, Pharmaxis Ltd engages in the research, development, and commercialization of healthcare products for fibrotic and inflammatory diseases. Established in 1998 and based in Frenchs Forest, Australia, Pharmaxis operates through two main segments: Mannitol business and New Drug Development. Its notable products include Bronchitol, an inhaled dry powder for cystic fibrosis, and Aridol, a test for airway inflammation. The company’s pipeline includes innovative treatments targeting diabetic retinopathy and various fibrotic diseases.
As investors weigh their options, the comparative analysis of Leap Therapeutics and Pharmaxis highlights significant differences in their financial performance and market outlook. With Pharmaxis showing stronger revenue and profitability metrics, it may present a more appealing investment opportunity for those looking to enter the biopharmaceutical sector.
