Patheon (NYSE: PTHN) and BioDelivery Sciences International (NASDAQ:BDSI) are both medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.

Risk & Volatility

Patheon has a beta of 2.69, meaning that its share price is 169% more volatile than the S&P 500. Comparatively, BioDelivery Sciences International has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500.

Insider & Institutional Ownership

0.7% of Patheon shares are held by institutional investors. Comparatively, 44.2% of BioDelivery Sciences International shares are held by institutional investors. 0.1% of Patheon shares are held by company insiders. Comparatively, 9.0% of BioDelivery Sciences International shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Patheon and BioDelivery Sciences International, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Patheon 0 6 1 0 2.14
BioDelivery Sciences International 0 1 5 0 2.83

Patheon currently has a consensus price target of $33.60, indicating a potential downside of 3.95%. BioDelivery Sciences International has a consensus price target of $4.50, indicating a potential upside of 65.44%. Given BioDelivery Sciences International’s stronger consensus rating and higher probable upside, analysts plainly believe BioDelivery Sciences International is more favorable than Patheon.

Valuation and Earnings

This table compares Patheon and BioDelivery Sciences International’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Patheon $1.87 billion 2.72 $31.70 million $0.75 46.64
BioDelivery Sciences International $15.55 million 9.77 -$67.13 million ($0.19) -14.32

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

Profitability

This table compares Patheon and BioDelivery Sciences International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Patheon 5.63% -35.93% 4.18%
BioDelivery Sciences International 10.40% 33.83% 6.43%

Summary

BioDelivery Sciences International beats Patheon on 9 of the 13 factors compared between the two stocks.

Patheon Company Profile

Patheon N.V. is a provider of outsourced pharmaceutical development and manufacturing services. The Company’s segments include Drug Product Services (DPS), Pharmaceutical Development Services (PDS) and Drug Substance Services (DSS). The DPS segment is engaged in manufacturing and packaging for approved prescription, over-the-counter (OTC) and nutritional products. The PDS segment provides a range of formulation, production and technical services from the early stages of a product’s development to regulatory approval, as well as for new formulations of approved products for lifecycle extension. The DSS segment provides small molecule active pharmaceutical ingredient (API) and outsourced manufacturing solutions for large molecule biological API from early development through commercial scale production. It provides an integrated range of API and finished drug product services to its customers, from formulation development to clinical and commercial-scale manufacturing.

BioDelivery Sciences International Company Profile

BioDelivery Sciences International, Inc. is a specialty pharmaceutical company. The Company develops and commercializes, either on its own or in partnerships with third parties, applications of approved therapeutics to address unmet medical needs using drug delivery technologies. The Company develops pharmaceutical products aimed principally in the areas of pain management and addiction. The Company’s products utilize the BioErodible MucoAdhesive (BEMA) drug delivery technology, a small, erodible polymer film for application to the buccal mucosa (the lining inside the cheek). The Company’s United Sates Food and Drug Administration (FDA) approved product, ONSOLIS (fentanyl buccal soluble film), as well as its approved products BUNAVAIL (buprenorphine and naloxone buccal film) buccal film and BELBUCA (buprenorphine) buccal film, utilize BEMA technology.

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