Kadmon (NYSE: KDMN) and Retrophin (NASDAQ:RTRX) are both small-cap medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Institutional & Insider Ownership

64.1% of Kadmon shares are owned by institutional investors. 4.0% of Kadmon shares are owned by company insiders. Comparatively, 3.7% of Retrophin shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Kadmon and Retrophin’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kadmon $12.26 million 21.72 -$79.77 million ($1.42) -2.38
Retrophin $154.94 million 7.82 -$59.73 million ($1.50) -20.23

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

Volatility and Risk

Kadmon has a beta of 3.65, indicating that its share price is 265% more volatile than the S&P 500. Comparatively, Retrophin has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Kadmon and Retrophin, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kadmon 1 0 3 0 2.50
Retrophin 0 0 1 0 3.00

Kadmon currently has a consensus target price of $13.25, suggesting a potential upside of 292.01%. Retrophin has a consensus target price of $43.00, suggesting a potential upside of 41.68%. Given Kadmon’s higher possible upside, equities analysts clearly believe Kadmon is more favorable than Retrophin.

Profitability

This table compares Kadmon and Retrophin’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kadmon -1,159.00% N/A -115.90%
Retrophin -41.95% -20.27% -11.80%

Summary

Kadmon beats Retrophin on 9 of the 14 factors compared between the two stocks.

Kadmon Company Profile

Kadmon Holdings, Inc., a biopharmaceutical company, discovers, develops, and commercializes small molecules and biologics primarily for the treatment of inflammatory and fibrotic diseases. The company markets and distributes a portfolio of branded generic ribavirin products for chronic hepatitis C virus infection; and distributes products in various therapeutic areas, including tetrabenazine for the treatment of chorea associated with Huntington's disease. Its lead product candidates include KD025, an inhibitor of the rho-associated coiled-coil kinase 2, which is in Phase II clinical studies for the treatment of chronic graft-versus-host, fibrotic, and psoriasis diseases; ROCK inhibitor platform, a rho-associated coiled-coil kinase inhibitor, which is in preclinical development to treat specific fibrotic and neurodegenerative diseases; and KD034, a generic formulation of trientine hydrochloride for the treatment of Wilson's disease, a genetic liver disease. The company also engages in developing Tesevatinib to treat autosomal dominant polycystic kidney disease (PKD) and autosomal recessive PKD. Kadmon Holdings, Inc. has strategic collaborations and license agreements with Symphony Evolution, Inc.; Nano Terra, Inc.; Dyax Corp.; Chiromics, LLC; MeiraGTx Limited; AbbVie Inc.; Zydus Pharmaceuticals USA, Inc.; Jinghua Pharmaceutical Group Co., Ltd.; and Camber Pharmaceuticals, Inc. The company is headquartered in New York, New York.

Retrophin Company Profile

Retrophin, Inc., a biopharmaceutical company, focuses on the development, acquisition, and commercialization of therapies for the treatment of rare diseases. Its marketed products include Chenodal, a synthetic oral form of chenodeoxycholic acid for the treatment of radiolucent stones in well-opacifying gallbladders; Cholbam, a cholic acid capsule to treat pediatric and adult patients with bile acid synthesis disorders due to single enzyme defects, and for adjunctive treatment of patients with peroxisomal disorders; and Thiola, a tiopronin tablet for the treatment of cystinuria. The company's product candidates consist of Fosmetpantotenate, a novel small molecule that is in Phase III clinical trial to treat pantothenate kinase-associated neurodegeneration; Sparsentan, which is in Phase III clinical trial for the treatment of focal segmental glomerulosclerosis; CNSA-001, an orally bioavailable proprietary form of sepiapterin that is in phase I clinical trial for the treatment of phenylketonuria; and Liquid Ursodeoxycholic Acid, a liquid formulation of ursodeoxycholic acid, which is in Phase III clinical trial for the treatment of primary biliary cholangitis. Retrophin, Inc. was founded in 2011 and is headquartered in San Diego, California.

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