VIVUS (NASDAQ: VVUS) and Transition Therapeutics (NASDAQ:TTHI) are both healthcare companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.

Profitability

This table compares VIVUS and Transition Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
VIVUS 26.71% 344.23% 12.56%
Transition Therapeutics N/A -58.00% -47.29%

Analyst Recommendations

This is a breakdown of current ratings and price targets for VIVUS and Transition Therapeutics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
VIVUS 0 0 0 0 N/A
Transition Therapeutics 0 0 0 0 N/A

Valuation and Earnings

This table compares VIVUS and Transition Therapeutics’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
VIVUS $124.26 million 0.40 $23.30 million $0.33 1.41
Transition Therapeutics N/A N/A N/A ($1.07) -1.42

VIVUS has higher revenue and earnings than Transition Therapeutics. Transition Therapeutics is trading at a lower price-to-earnings ratio than VIVUS, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

31.4% of VIVUS shares are owned by institutional investors. 4.4% of VIVUS shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

VIVUS beats Transition Therapeutics on 8 of the 8 factors compared between the two stocks.

VIVUS Company Profile

VIVUS, Inc. is a biopharmaceutical company. The Company operates in the development and commercialization of therapeutic products segment. It provides over two therapies approved by the Food and Drug Association (FDA), which include Qsymia (phentermine and topiramate extended-release) for chronic weight management and STENDRA (avanafil) for erectile dysfunction (ED). The Company has completed the Phase II studies of Qsymia for the indication of Obstructive Sleep Apnea (OSA) and diabetes. Its Qsymia is available in over 40,000 certified retail pharmacies across the country. Its STENDRA is also approved by the European Commission (EC), under the name, SPEDRA, for the treatment of ED in the Europe. The United States Food and Drug Association approved a Supplemental New Drug Application (sNDA) for STENDRA. STENDRA is indicated to be taken approximately 15 minutes before sexual activity.

Transition Therapeutics Company Profile

Transition Therapeutics Inc. is a product-focused biopharmaceutical company. The Company’s principal business activity is the researching and developing of therapeutic agents. The Company is developing therapeutics for central nervous system (CNS) and metabolic disease indications. The Company’s technologies are focused on the treatment of agitation and aggression in Alzheimer’s disease and diabetes. The Company’s subsidiary, Transition Therapeutics Ireland Limited (Transition Ireland), is developing two drug candidates: neuropsychiatric candidate ELND005 and androgen deficiency candidate TT701. The Company’s subsidiary, Waratah Pharmaceuticals Inc. (Waratah), is developing diabetes drug candidate TT401. The Company’s other two entities provide development services in support of the clinical and non-clinical activities of Transition Ireland and Waratah.

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