XOMA Corporation (NASDAQ: XOMA) and Affymax (OTCMKTS:AFFY) are both small-cap medical companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, institutional ownership, profitability and risk.

Profitability

This table compares XOMA Corporation and Affymax’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
XOMA Corporation -329.42% N/A -155.46%
Affymax N/A N/A N/A

Valuation and Earnings

This table compares XOMA Corporation and Affymax’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
XOMA Corporation $12.31 million 6.76 -$30.55 million ($7.32) -1.50
Affymax $41,999.00 45.08 -$47.65 million N/A N/A

XOMA Corporation has higher revenue and earnings than Affymax.

Risk & Volatility

XOMA Corporation has a beta of 3.14, meaning that its stock price is 214% more volatile than the S&P 500. Comparatively, Affymax has a beta of 2, meaning that its stock price is 100% more volatile than the S&P 500.

Institutional & Insider Ownership

32.9% of XOMA Corporation shares are owned by institutional investors. 3.0% of XOMA Corporation shares are owned by insiders. Comparatively, 1.6% of Affymax shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for XOMA Corporation and Affymax, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
XOMA Corporation 0 3 1 0 2.25
Affymax 0 0 0 0 N/A

XOMA Corporation presently has a consensus price target of $12.00, suggesting a potential upside of 9.59%. Given XOMA Corporation’s higher possible upside, equities research analysts plainly believe XOMA Corporation is more favorable than Affymax.

Summary

XOMA Corporation beats Affymax on 7 of the 10 factors compared between the two stocks.

XOMA Corporation Company Profile

XOMA Corporation is a development-stage biotechnology company. The Company focuses on the discovery and development of monoclonal antibody-based therapeutics. It has five products in its endocrine portfolio, two of which are developed as part of its XOMA Metabolism (XMet) platform. Its products include XOMA 358, XOMA 129, XOMA 213 and Gevokizumab. Its XOMA 358 is meant for long-acting treatment of hyperinsulinemic hypoglycemia. XOMA 129 is meant for rapid onset, short-acting treatment of severe acute hypoglycemia. XOMA 213 is a Phase II-ready product candidate targeting the prolactin receptor, as well as research-stage programs targeting the parathyroid receptor (PTH1R) and the adrenal corticotropic hormone (ACTH). Gevokizumab is a humanized monoclonal antibody with allosteric properties that has the potential to treat patients with a range of inflammatory diseases. Its technologies include Antibody Discovery Advanced Platform Technologies (ADAPT), ModulX and OptimX.

Affymax Company Profile

Affymax, Inc. is a biopharmaceutical company. The Company’s product OMONTYS (peginesatide) is for the treatment of anemia due to chronic kidney disease in adult patients on dialysis. OMONTYS is a synthetic, peptide-based erythropoiesis stimulating agent (ESA), designed to stimulate production of red blood cells. The Company has a collaboration to develop and commercialize peginesatide with Takeda Pharmaceutical Company Limited. In March 2012, the Food and Drug Administration (FDA) approved the Company’s product, OMONTYS.

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