Leap Therapeutics (NASDAQ: LPTX) and Pharmaxis (OTCMKTS: PXSLY) are both small-cap biopharmaceutical companies competing in the healthcare market. A recent analysis compares the two firms across various financial and operational metrics to determine which company offers a stronger investment opportunity.
Profitability and Earnings Overview
In assessing profitability, Leap Therapeutics and Pharmaxis exhibit contrasting performance metrics. Pharmaxis has reported higher revenue and earnings per share (EPS) than Leap Therapeutics. This indicates a more robust financial position for Pharmaxis, which may appeal to potential investors looking for profitability.
Key metrics such as net margins, return on equity, and return on assets provide further insight into the companies’ financial health. Pharmaxis has shown a stronger ability to convert sales into profits, highlighting its operational efficiency.
Volatility and Risk Assessment
When evaluating risk, Leap Therapeutics presents a notably lower volatility profile, with a beta of -0.06. This suggests that its share price is significantly less volatile than the S&P 500, providing a potentially safer investment option. In contrast, Pharmaxis has a beta of 1.22, indicating that its share price is 22% more volatile than the market benchmark.
Investors often assess volatility as a critical factor in their decision-making process, particularly when considering long-term investments. The significant disparity in beta values between the two companies may influence investor preference based on their risk tolerance.
Analyst Ratings and Institutional Ownership
Analyst ratings reveal a mixed sentiment towards both companies. According to data from MarketBeat.com, there are varying price targets and recommendations for Leap Therapeutics and Pharmaxis, reflecting differing expectations among analysts. Such ratings can heavily influence market perception and investor behavior.
Institutional ownership also plays a pivotal role in evaluating a company’s potential. Approximately 30.5% of Leap Therapeutics shares are held by institutional investors, which indicates a level of confidence from larger financial entities in the company’s future performance. Conversely, only 4.3% of Leap Therapeutics shares are held by insiders, which may suggest less internal confidence compared to Pharmaxis.
Company Profiles
Leap Therapeutics, Inc., based in Cambridge, Massachusetts, focuses on developing therapies for cancer treatment. Its lead program, DKN-01, is a monoclonal antibody that targets Dickkopf-related protein 1 and is currently being evaluated in multiple clinical trials for various cancer types. The company has a licensing agreement with BeiGene, Ltd. for DKN-01 in Asia (excluding Japan), Australia, and New Zealand. Leap Therapeutics was established in 2011 and rebranded from HealthCare Pharmaceuticals in November 2015.
Pharmaxis Ltd., headquartered in Frenchs Forest, Australia, specializes in healthcare products addressing fibrotic and inflammatory diseases. Its product portfolio includes Bronchitol, designed for cystic fibrosis, and Aridol, which tests airway inflammation. Pharmaxis is also advancing a pipeline of new drugs targeting conditions like diabetic retinopathy and various chronic fibrotic diseases. Founded in 1998, the company has developed innovative solutions aimed at improving patient outcomes.
In summary, Pharmaxis outperforms Leap Therapeutics in five out of eight critical factors considered in this analysis. As both companies continue to navigate the competitive biopharmaceutical landscape, their differing strengths and weaknesses will likely impact their future trajectories and appeal to investors.
