Peregrine Pharmaceuticals (NASDAQ: PPHM) and Catalyst Biosciences (NASDAQ:CBIO) are both small-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, dividends, analyst recommendations and risk.

Profitability

This table compares Peregrine Pharmaceuticals and Catalyst Biosciences’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Peregrine Pharmaceuticals -23.15% -38.19% -16.66%
Catalyst Biosciences -2,438.50% -91.67% -55.28%

Earnings and Valuation

This table compares Peregrine Pharmaceuticals and Catalyst Biosciences’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Peregrine Pharmaceuticals $57.63 million 3.42 -$28.15 million ($0.64) -6.83
Catalyst Biosciences $400,000.00 63.90 -$16.94 million ($13.12) -0.45

Catalyst Biosciences has higher revenue, but lower earnings than Peregrine Pharmaceuticals. Peregrine Pharmaceuticals is trading at a lower price-to-earnings ratio than Catalyst Biosciences, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

69.6% of Peregrine Pharmaceuticals shares are held by institutional investors. Comparatively, 31.3% of Catalyst Biosciences shares are held by institutional investors. 4.9% of Peregrine Pharmaceuticals shares are held by company insiders. Comparatively, 5.0% of Catalyst Biosciences shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Peregrine Pharmaceuticals has a beta of 2.61, indicating that its stock price is 161% more volatile than the S&P 500. Comparatively, Catalyst Biosciences has a beta of 1.74, indicating that its stock price is 74% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Peregrine Pharmaceuticals and Catalyst Biosciences, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Peregrine Pharmaceuticals 0 0 1 0 3.00
Catalyst Biosciences 0 0 2 0 3.00

Peregrine Pharmaceuticals presently has a consensus target price of $10.00, suggesting a potential upside of 128.83%. Catalyst Biosciences has a consensus target price of $10.50, suggesting a potential upside of 77.07%. Given Peregrine Pharmaceuticals’ higher probable upside, analysts clearly believe Peregrine Pharmaceuticals is more favorable than Catalyst Biosciences.

Summary

Peregrine Pharmaceuticals beats Catalyst Biosciences on 8 of the 12 factors compared between the two stocks.

About Peregrine Pharmaceuticals

Peregrine Pharmaceuticals, Inc. (Peregrine) is a biopharmaceutical company. The Company operates through two segments: Peregrine, which is engaged in the research and development of monoclonal antibodies for the treatment of cancer, and Avid, which is engaged in providing contract manufacturing services for third party customers on a fee-for-service basis while also supporting its internal drug development efforts. Bavituximab is its lead immunotherapy candidate. Bavituximab is a monoclonal antibody that targets and binds to phosphatidylserine (PS), a immunosuppressive molecule that is usually located inside the membrane of healthy cells, but then flips and becomes exposed on the outside of cells in the tumor microenvironment, causing the tumor to evade immune detection. The Company’s subsidiary is Avid Bioservices, Inc. (Avid). Avid provides integrated current good manufacturing practices (cGMP) services from cell line development to commercial biomanufacturing.

About Catalyst Biosciences

Catalyst Biosciences, Inc., formerly Targacept, Inc., is a clinical-stage biopharmaceutical company. The Company is focused on creating and developing medicines to address serious medical conditions. The Company focuses its product development efforts in the fields of hemostasis, including the treatment of hemophilia and surgical bleeding, and inflammation, including prevention of delayed graft function (DGF) in renal transplants and the treatment of dry age-related macular degeneration (dry AMD), a condition that can cause visual impairment or blindness. The Company’s advanced program is a coagulation Factor VIIa variant, CB 813d, that has completed a Phase I clinical trial in severe hemophilia A and B patients. In addition to its lead Factor VIIa program, it has approximately two other coagulation factors, a Factor IX variant, CB 2679d/ISU 304, that is in advanced preclinical development, and a Factor Xa variant that has reached the advanced lead preclinical-stage of development.

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