Critical Contrast: Burning Rock Biotech (NASDAQ:BNR) vs. ADC Therapeutics (NYSE:ADCT)

ADC Therapeutics (NYSE:ADCT) and Burning Rock Biotech (NASDAQ:BNR) are both small-cap healthcare companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, valuation, institutional ownership and dividends.

Volatility and Risk

ADC Therapeutics has a beta of 1.82, meaning that its share price is 82% more volatile than the S&P 500. Comparatively, Burning Rock Biotech has a beta of 1.5, meaning that its share price is 50% more volatile than the S&P 500.

Institutional and Insider Ownership

41.1% of ADC Therapeutics shares are owned by institutional investors. Comparatively, 30.0% of Burning Rock Biotech shares are owned by institutional investors. 5.1% of ADC Therapeutics shares are owned by company insiders. Comparatively, 30.3% of Burning Rock Biotech shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings for ADC Therapeutics and Burning Rock Biotech, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ADC Therapeutics	1	2	3	0	2.33
Burning Rock Biotech	1	0	0	0	1.00

ADC Therapeutics presently has a consensus price target of $5.00, indicating a potential upside of 236.47%. Given ADC Therapeutics’ stronger consensus rating and higher possible upside, analysts clearly believe ADC Therapeutics is more favorable than Burning Rock Biotech.

Earnings and Valuation

This table compares ADC Therapeutics and Burning Rock Biotech”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ADC Therapeutics	$81.36 million	2.33	-$142.62 million	($0.66)	-2.25
Burning Rock Biotech	$77.16 million	1.79	-$7.92 million	($0.87)	-15.07

Burning Rock Biotech has lower revenue, but higher earnings than ADC Therapeutics. Burning Rock Biotech is trading at a lower price-to-earnings ratio than ADC Therapeutics, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares ADC Therapeutics and Burning Rock Biotech’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ADC Therapeutics	-121.77%	N/A	-32.74%
Burning Rock Biotech	-13.60%	-12.98%	-8.59%

Summary

ADC Therapeutics beats Burning Rock Biotech on 10 of the 14 factors compared between the two stocks.

About ADC Therapeutics

ADC Therapeutics SA focuses on advancing its proprietary antibody drug conjugate (ADC) technology platform to transform the treatment paradigm for patients with hematologic malignancies and solid tumors. Its flagship product is ZYNLONTA, a CD19-directed ADC, received accelerated approval from the U.S. Food and Drug Administration and conditional approval from the European Commission for the treatment of relapsed or refractory diffuse large B-cell lymphoma (DLBCL) after two or more lines of systemic therapy. The company is also seeking to continue expanding ZYNLONTA into international markets and into earlier lines of DLBCL and indolent lymphomas, including follicular lymphoma (FL) and marginal zone lymphoma (MZL) as a single agent and in combination through its LOTIS-5 confirmatory Phase 3 clinical trial and LOTIS-7 Phase 1b clinical trial, as well as through investigator-initiated trials (IITs). In addition, it is investigating a CD-22 targeted compound, ADCT-602 that is in a Phase 1/2 investigator-initiated study in relapsed or refractory B-cell acute lymphoblastic leukemia. Further, its clinical-stage pipeline consists of ADCT-601 (mipasetamab uzoptirine) targeting AXL as a single agent and/or in combination in sarcoma, pancreatic, and NSCLC, as well as pre-clinical stage pipeline includes a portfolio of next generation investigational ADCs targeting Claudin-6, NaPi2b, PSMA, and other undisclosed targets. The company was incorporated in 2011 and is headquartered in Epalinges, Switzerland.

About Burning Rock Biotech

Burning Rock Biotech Limited primarily develops and commercializes cancer therapy selection tests in the People's Republic of China. It operates in three segments: Central Laboratory Business, In-Hospital Business, and Pharma Research and Development Services. The company primarily offers next-generation sequencing-based tissue and liquid biopsy cancer therapy selection and prognosis prediction tests for various range of cancer types, including lung cancer, gastrointestinal cancer, prostate cancer, breast cancer, lymphomas, thyroid cancer, colorectal cancer, ovarian cancer, pancreatic cancer, and bladder cancer using tissue and liquid biopsy samples. Its principal products include OncoCompass IO, a corresponding test for liquid biopsy samples; OncoScreen IO, a pan-cancer test for tissue samples; and OncoCompass Target, a ctDNA liquid biopsy-based test for NSCLC. In addition, the company provides ColonCore for assessing microsatellite loci related to MSI status and detecting mutations in genes associated with gastrointestinal cancers; and brPROPHET, a pre-operative ctDNA detection and post-operative MRD calling for relapsed patients. Further, it has development and commercialization agreement with Myriad Genetics, Inc. to in-license Myriad myChoice tumor testing in China; licensing agreement with Oncocyte Corporation to in-license DetermaRx, a risk stratification test for early stage lung cancer patients in China; and collaborations on clinical trials and research studies with AstraZeneca, Bayer, Johnson & Johnson, CStone, BeiGene, Abbisko Therapeutics, and IMPACT Therapeutics and Merck KGaA. Additionally, the company offers OncoMaster, an automatic NGS data analysis and report interpretation machine for in-hospital model. Burning Rock Biotech Limited was incorporated in 2014 and is headquartered in Guangzhou, China.