Paratek Pharmaceuticals (NASDAQ: PRTK) and Axovant Sciences (NYSE:AXON) are both small-cap medical companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, valuation, dividends, risk and earnings.

Insider & Institutional Ownership

82.3% of Paratek Pharmaceuticals shares are owned by institutional investors. 4.9% of Paratek Pharmaceuticals shares are owned by company insiders. Comparatively, 72.5% of Axovant Sciences shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Paratek Pharmaceuticals has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500. Comparatively, Axovant Sciences has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Paratek Pharmaceuticals and Axovant Sciences, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Paratek Pharmaceuticals 0 0 7 1 3.13
Axovant Sciences 2 3 6 0 2.36

Paratek Pharmaceuticals currently has a consensus price target of $39.50, indicating a potential upside of 57.06%. Axovant Sciences has a consensus price target of $14.25, indicating a potential upside of 125.12%. Given Axovant Sciences’ higher probable upside, analysts clearly believe Axovant Sciences is more favorable than Paratek Pharmaceuticals.

Profitability

This table compares Paratek Pharmaceuticals and Axovant Sciences’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Paratek Pharmaceuticals N/A -107.52% -64.00%
Axovant Sciences N/A -167.85% -104.54%

Earnings and Valuation

This table compares Paratek Pharmaceuticals and Axovant Sciences’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Paratek Pharmaceuticals $7.56 million 92.35 -$90.38 million ($4.00) -6.29
Axovant Sciences N/A N/A -$207.25 million ($2.09) -3.03

Paratek Pharmaceuticals has higher revenue and earnings than Axovant Sciences. Paratek Pharmaceuticals is trading at a lower price-to-earnings ratio than Axovant Sciences, indicating that it is currently the more affordable of the two stocks.

Summary

Paratek Pharmaceuticals beats Axovant Sciences on 9 of the 12 factors compared between the two stocks.

About Paratek Pharmaceuticals

Paratek Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company. The Company is focused on the development and commercialization of therapeutics based upon tetracycline chemistry. Its product candidates are the antibacterials omadacycline and sarecycline. Omadacycline is an antibiotic being developed for use as an empiric monotherapy option for patients suffering from serious, community-acquired bacterial infections. Sarecycline is a tetracycline-derived compound designed for use in the treatment of acne and rosacea. Its other product candidates are tetracycline-derived, molecular entities and are designed to utilize the recognized immune-modulation, anti-inflammatory and other beneficial properties of the tetracycline class. These research stage programs include product candidates for multiple sclerosis, spinal muscular atrophy, systemic inflammatory diseases, such as rheumatoid arthritis and inflammatory bowel diseases.

About Axovant Sciences

Axovant Sciences Ltd. is a clinical-stage biopharmaceutical company. The Company is focused on acquiring, developing and commercializing therapeutics for the treatment of dementia, including Alzheimer’s disease and Lewy body dementia. The Company intends to develop a pipeline of product candidates to address the cognitive, functional and behavioral aspects of dementia and related neurological disorders. The Company is focused to develop its lead product candidate, intepirdine, a selective 5-hydroxytryptamine 6 receptor antagonist, for the treatment of Alzheimer’s disease and dementia with Lewy bodies (DLB). The Company also focuses on developing nelotanserin, a selective 5-hydroxytryptamine 2A receptor inverse agonist, for the treatment of rapid eye movement (REM) behavior disorder (RBD) in DLB patients, and visual hallucinations in patients with Lewy body dementia. The Company’s pipeline also includes RVT-103 and RVT-104.

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