Ra Pharmctl (NASDAQ: RARX) and Eleven Biotherapeutics (NASDAQ:EBIO) are both small-cap medical companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, earnings, profitability, analyst recommendations and risk.

Insider and Institutional Ownership

66.8% of Ra Pharmctl shares are owned by institutional investors. Comparatively, 5.0% of Eleven Biotherapeutics shares are owned by institutional investors. 14.5% of Ra Pharmctl shares are owned by company insiders. Comparatively, 28.7% of Eleven Biotherapeutics shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Ra Pharmctl and Eleven Biotherapeutics’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Ra Pharmctl $4.93 million 64.86 -$28.86 million ($2.47) -5.72
Eleven Biotherapeutics $29.98 million 0.69 $1.89 million $0.21 3.24

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Ra Pharmctl and Eleven Biotherapeutics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ra Pharmctl 0 0 5 0 3.00
Eleven Biotherapeutics 0 0 0 0 N/A

Ra Pharmctl presently has a consensus target price of $26.40, indicating a potential upside of 86.84%. Given Ra Pharmctl’s higher possible upside, research analysts plainly believe Ra Pharmctl is more favorable than Eleven Biotherapeutics.

Profitability

This table compares Ra Pharmctl and Eleven Biotherapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ra Pharmctl N/A -47.00% -43.31%
Eleven Biotherapeutics 11.28% 4.26% 1.57%

Summary

Eleven Biotherapeutics beats Ra Pharmctl on 7 of the 11 factors compared between the two stocks.

About Ra Pharmctl

Ra Pharmaceuticals, Inc. is a United States-based clinical-stage biopharmaceutical company. The Company focuses on the development of therapeutics for diseases of complement dysregulation and a range of orphan indications. It utilizes small molecules and peptide approaches to address pathological targets in the complement cascade. It has leveraged the Extreme Diversity peptide chemistry platform to develop a portfolio of products that selectively inhibit the complement system and other immune targets. Its main program, RA101495, is a macrocyclic peptide inhibitor of complement component 5 (C5), which is in Phase I stage of development for the treatment of paroxysmal nocturnal hemoglobinuria (PNH). RA101495 binds a site on the C5 protein to inhibit cleavage into C5a and C5b, thereby preventing red blood cell lysis by inhibiting the production and assembly of the membrane attack complex (MAC). RA101495 is being developed as an alternative to eculizumab therapy for patients with PNH.

About Eleven Biotherapeutics

Eleven Biotherapeutics, Inc. is a preclinical-stage biopharmaceutical company. The Company applies its AMP-Rx platform to the discovery and development of protein therapeutics to treat diseases of the eye. The Company’s product candidate, which is still in preclinical development, is EBI-031, which was designed, engineered and generated using its AMP-Rx platform and are developing as an intravitreal injection for diabetic macular edema (DME) and uveitis. The Company’s therapeutic approach is based on the role of cytokines in diseases of the eye, its understanding of the structural biology of cytokines and its ability to design and engineer proteins to modulate the effects of cytokines. The Company is developing EBI-031 as an intravitreal injection for DME and uveitis. In addition to EBI-031, the Company has another product candidate in early preclinical development, which is designed to block vascular endothelial growth factor (VEGF).

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