3SBio (NASDAQ: SSRX) and Kadmon (NYSE:KDMN) are both small-cap biopharmaceuticals companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, dividends, analyst recommendations, profitability and earnings.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for 3SBio and Kadmon, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
3SBio 0 0 1 0 3.00
Kadmon 1 1 2 0 2.25

Kadmon has a consensus price target of $9.75, suggesting a potential upside of 173.88%. Given Kadmon’s higher probable upside, analysts clearly believe Kadmon is more favorable than 3SBio.

Profitability

This table compares 3SBio and Kadmon’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
3SBio N/A N/A N/A
Kadmon -555.91% N/A -124.91%

Valuation & Earnings

This table compares 3SBio and Kadmon’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
3SBio N/A N/A N/A $0.73 22.73
Kadmon $26.06 million 10.74 -$208.75 million ($1.75) -2.03

3SBio has higher earnings, but lower revenue than Kadmon. Kadmon is trading at a lower price-to-earnings ratio than 3SBio, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

51.9% of Kadmon shares are held by institutional investors. 8.4% of Kadmon shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Kadmon beats 3SBio on 5 of the 9 factors compared between the two stocks.

3SBio Company Profile

3SBio Inc. is a biotechnology company in the People’s Republic of China with research and development, manufacturing, and marketing capabilities focusing on bio-pharmaceutical products. The Company recombinant, or genetically engineered, protein-based products and product candidates are designed to address markets with unmet medical needs in nephrology, oncology, supportive cancer care, inflammation and infectious diseases. Its principal products are EPIAO and TPIAO. In addition, it has two legacy products, Intefen and Inleusin; and an in-licensed product, Iron Sucrose Supplement. The Company focuses on its research and development efforts on both novel and validated protein-based therapeutics for the treatment of diseases in the areas of nephrology, oncology, supportive cancer care, inflammation and infectious diseases, and other selected areas. In May 2013, the Company merged with Decade Sunshine Limited and Decade Sunshine Merger Sub.

Kadmon Company Profile

Kadmon Holdings, Inc. is an integrated biopharmaceutical company engaged in the discovery, development and commercialization of small molecules and biologics to address disease areas of various unmet medical needs. The Company is developing product candidates in a number of indications within autoimmune and fibrotic disease, oncology and genetic diseases. Its product pipeline consists of KD025, Tesevatinib and KD034. The Company’s other products include Ribasphere RibaPak, Ribasphere, Qsymia, Tetrabenazine and Valganciclovir. KD025 is an orally available, selective small molecule inhibitor of Rho-associated coiled-coil kinase 2 (ROCK2), a molecular target in multiple autoimmune, fibrotic and neurodegenerative diseases. Tesevatinib is an oral tyrosine kinase inhibitor (TKI) designed to block key molecular drivers of tumor growth, metastases and drug resistance. KD034 is the Company’s portfolio of enhanced formulations of trientine hydrochloride for the treatment of Wilson’s disease.

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