Vericel Corporation (NASDAQ: VCEL) and Tokai Pharmaceuticals (NASDAQ:NVUS) are both small-cap biopharmaceuticals companies, but which is the better business? We will contrast the two companies based on the strength of their risk, institutional ownership, earnings, dividends, valuation, analyst recommendations and profitability.

Earnings & Valuation

This table compares Vericel Corporation and Tokai Pharmaceuticals’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Vericel Corporation $54.38 million 2.60 -$19.56 million ($0.88) -4.60
Tokai Pharmaceuticals N/A N/A -$37.95 million ($7.20) -0.53

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Vericel Corporation and Tokai Pharmaceuticals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vericel Corporation 0 0 3 0 3.00
Tokai Pharmaceuticals 0 0 0 0 N/A

Vericel Corporation presently has a consensus target price of $6.33, suggesting a potential upside of 56.38%. Given Vericel Corporation’s higher probable upside, research analysts plainly believe Vericel Corporation is more favorable than Tokai Pharmaceuticals.

Profitability

This table compares Vericel Corporation and Tokai Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vericel Corporation -45.11% -265.45% -52.01%
Tokai Pharmaceuticals N/A -156.99% -140.33%

Institutional and Insider Ownership

32.8% of Vericel Corporation shares are owned by institutional investors. Comparatively, 39.8% of Tokai Pharmaceuticals shares are owned by institutional investors. 3.3% of Vericel Corporation shares are owned by company insiders. Comparatively, 5.2% of Tokai Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Vericel Corporation has a beta of 3.07, meaning that its share price is 207% more volatile than the S&P 500. Comparatively, Tokai Pharmaceuticals has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500.

Summary

Vericel Corporation beats Tokai Pharmaceuticals on 7 of the 11 factors compared between the two stocks.

About Vericel Corporation

Vericel Corporation, formerly Aastrom Biosciences, Inc., is a commercial-stage biopharmaceutical company dedicated to the identification, development and commercialization of therapies that enable the body to repair and regenerate damaged tissues and organs to restore normal structure and function. The Company operates through the research, product development, manufacture and distribution of patient-specific, expanded cellular therapies for use in the treatment of specific diseases segment. Its autologous cell therapy products include Carticel (autologous cultured chondrocytes), which is an autologous chondrocyte implant for the treatment of cartilage defects in the knee, and Epicel (cultured epidermal autografts), which is a permanent skin replacement for the treatment of patients with deep-dermal or full-thickness burns. The Company is developing MACI, which is a third-generation autologous chondrocyte implant and ixmyelocel-T, which is a patient-specific multicellular therapy.

About Tokai Pharmaceuticals

Novus Therapeutics, Inc., formerly Tokai Pharmaceuticals, Inc., is a pharmaceutical company. The Company is focused on the acquisition, development, and commercialization of ear, nose, and throat products. It has two platforms: OP-01 Foam Platform and OP-02 Surfactant Program. OP-01 is developed with the intent to be used as a delivery vehicle for drugs treating ears, as well as the nasal and sinus cavities. OP-01 is currently being developed as an improved treatment option for acute otitis externa. OP-02 is a daily nasal spray that is designed to improve and maintain a healthy middle ear. OP-02 is being developed as a potential treatment option for patients with otitis media and Eustachian tube dysfunction. OP-02 is a combination drug product, which comprises two components: surfactant dipalmitoylphosphatidylcholine and a spreading agent cholesteryl palmitate. The product is sprayed through the nostrils toward the opening of the Eustachian tube at the back of the nasal cavity.

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