Critical Analysis: Fortress Biotech (NASDAQ:FBIO) versus Theravance Biopharma (NASDAQ:TBPH)

Theravance Biopharma (NASDAQ:TBPH) and Fortress Biotech (NASDAQ:FBIO) are both small-cap healthcare companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, risk, dividends, earnings and profitability.

Valuation and Earnings

This table compares Theravance Biopharma and Fortress Biotech”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Theravance Biopharma	$107.46 million	8.22	$105.89 million	$1.01	16.85
Fortress Biotech	$63.26 million	1.32	$6.82 million	$2.64	0.95

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

Profitability

This table compares Theravance Biopharma and Fortress Biotech’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Theravance Biopharma	51.58%	-0.77%	-0.46%
Fortress Biotech	163.32%	83.47%	42.98%

Volatility & Risk

Theravance Biopharma has a beta of 0.25, indicating that its stock price is 75% less volatile than the S&P 500. Comparatively, Fortress Biotech has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Theravance Biopharma and Fortress Biotech, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Theravance Biopharma	0	8	0	0	2.00
Fortress Biotech	1	1	2	0	2.25

Theravance Biopharma presently has a consensus target price of $19.40, indicating a potential upside of 13.98%. Fortress Biotech has a consensus target price of $17.00, indicating a potential upside of 577.29%. Given Fortress Biotech’s stronger consensus rating and higher probable upside, analysts plainly believe Fortress Biotech is more favorable than Theravance Biopharma.

Insider and Institutional Ownership

99.1% of Theravance Biopharma shares are owned by institutional investors. Comparatively, 96.5% of Fortress Biotech shares are owned by institutional investors. 7.6% of Theravance Biopharma shares are owned by insiders. Comparatively, 28.5% of Fortress Biotech shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Fortress Biotech beats Theravance Biopharma on 9 of the 14 factors compared between the two stocks.

About Theravance Biopharma

Theravance Biopharma, Inc. is a diversified biopharmaceutical company primarily focused on the discovery, development and commercialization of organ-selective medicines. Its purpose is to pioneer a new generation of small molecule drugs designed to better meet patient needs. Its research is focused in the areas of inflammation and immunology.
In pursuit of its purpose, Theravance Biopharma applies insights and innovation at each stage of its business and utilizes its internal capabilities and those of partners around the world. The Company applies organ-selective expertise to target disease biologically, to discover and develop medicines that may expand the therapeutic index with the goal of maximizing efficacy and limiting systemic side effects. These efforts leverage years of experience in developing lung-selective medicines to treat respiratory disease, including FDA-approved YUPELRI® (revefenacin) inhalation solution indicated for the maintenance treatment of patients with chronic obstructive pulmonary disease (COPD). Its pipeline of internally discovered programs is targeted to address significant patient needs.
Theravance Biopharma has an economic interest in potential future payments from Glaxo Group Limited or one of its affiliates (GSK) pursuant to its agreements with Innoviva, Inc. relating to certain programs, including TRELEGY.
For more information, please visit www.theravance.com.

About Fortress Biotech

Fortress Biotech, Inc., a biopharmaceutical company, develops dermatology, pharmaceutical, and biotechnology products in the United States. The company markets dermatology products, such as Qbrexza a medicated cloth towelette for the treatment of primary axillary hyperhidrosis; Accutane capsules for severe recalcitrant nodular acne; Amzeeq for severe acne vulgaris; Zilxi, a topical foam; Exelderm cream and solution for topical use; Targadox an oral doxycycline drug for adjunctive therapy for severe acne; Luxamend; sulconazole nitrate cream and solution for tinea cruris and tinea corporis; and doxycycline hyclate tablet. It also develops late stage product candidates, such as intravenous Tramadol for the treatment of post-operative acute pain; CUTX-101, an injection for the treatment of Menkes disease; Cosibelimab for metastatic cancers; Olafertinib for the treatment of patients with EGFR mutation-positive NSCLC; CAEL-101 for the treatment of amyloid light chain amyloidosis; Triplex vaccine for cytomegalovirus; and DFD-29 for the treatment of rosacea. The company’s early stage product candidates include Dotinurad for gout; MB-106 for B-cell non-hodgkin lymphoma; MB-101 for glioblastoma; MB-108 for recurrent GBM; MB-109 for refractory glioblastoma; AJ201, an androgen receptor degradation enhancer; BAER-101, a positive allosteric modulator; MB-117 for newly diagnosed x-linked severe combined immunodeficiency; and MB217 for previously transplanted; and MB-110 for RAG1 severe combined immunodeficiency. Its preclinical product candidates comprise Mayo Clinic In Vivo CAR T Platform Technology; AAV-ATP7A gene therapy; AVTS-001 gene therapy; CK-103 BET inhibitor; CEVA-D and CEVA-102; CK-302, an anti-GITR; CK-303, an anti-CAIX; and oligonucleotide platform. The company was formerly known as Coronado Biosciences, Inc. and changed its name to Fortress Biotech, Inc. in April 2015. Fortress Biotech, Inc. was incorporated in 2006 and is based in Bay Harbor Islands, Florida.