CytomX Therapeutics (NASDAQ: CTMX) and Galmed Pharmaceuticals (NASDAQ:GLMD) are both small-cap healthcare companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, risk, earnings and analyst recommendations.

Insider and Institutional Ownership

63.1% of CytomX Therapeutics shares are owned by institutional investors. Comparatively, 9.9% of Galmed Pharmaceuticals shares are owned by institutional investors. 8.0% of CytomX Therapeutics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares CytomX Therapeutics and Galmed Pharmaceuticals’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CytomX Therapeutics $15.04 million 62.16 -$58.90 million ($1.57) -15.50
Galmed Pharmaceuticals $470,000.00 314.73 -$16.95 million ($1.22) -9.52

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

Analyst Recommendations

This is a summary of current ratings for CytomX Therapeutics and Galmed Pharmaceuticals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CytomX Therapeutics 1 2 8 0 2.64
Galmed Pharmaceuticals 0 0 4 0 3.00

CytomX Therapeutics presently has a consensus target price of $33.88, indicating a potential upside of 39.17%. Galmed Pharmaceuticals has a consensus target price of $20.75, indicating a potential upside of 78.57%. Given Galmed Pharmaceuticals’ stronger consensus rating and higher possible upside, analysts plainly believe Galmed Pharmaceuticals is more favorable than CytomX Therapeutics.

Profitability

This table compares CytomX Therapeutics and Galmed Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CytomX Therapeutics -113.64% -92.42% -20.70%
Galmed Pharmaceuticals -1,242.49% -167.83% -110.52%

Summary

CytomX Therapeutics beats Galmed Pharmaceuticals on 7 of the 13 factors compared between the two stocks.

About CytomX Therapeutics

CytomX Therapeutics, Inc. is a clinical-stage, oncology-focused biopharmaceutical company. The Company uses its Probody technology platform to create cancer immunotherapies against clinically validated targets, as well as to develop cancer therapeutics against difficult-to-drug targets. Its pipeline is focused on the development of therapies in a set of modalities: Probody cancer immunotherapies, Probody drug conjugates, T-cell engaging Probody bispecifics and ProCAR-NK cell therapies. Its product candidates include CX-072, CX-2009, CX-2029, Cytotoxic T-lymphocyte-associated protein 4 (CTLA-4) and CX-188. Its Probody platform utilizes active proteases in tumor tissue to allow monoclonal antibody-based therapies. Its investigational Probody therapeutics address clinically validated cancer targets in immuno-oncology, such as programmed death-ligand 1, against which CX-072 is directed, as well as targets, such as cluster of differentiation 166, against, which CX-2009 is directed.

About Galmed Pharmaceuticals

Galmed Pharmaceuticals Ltd. is a clinical-stage biopharmaceutical company. The Company focuses on the development and commercialization of once-daily, oral therapy for the treatment of liver diseases and cholesterol gallstones utilizing its synthetic fatty-acid/bile-acid conjugate (FABAC), called aramchol. Its product candidate, aramchol, is a disease modifying treatment for fatty liver disorders, including Non-Alcoholic Steato-hepatitis (NASH). The Company’s Aramchol is a conjugate of cholic acid and arachidic acid, which is a member of synthetic Fatty-Acid/Bile-Acid Conjugates (FABACs). FABACs are composed of endogenic compounds. Aramchol affects liver fat metabolism and has been shown in a Phase IIa clinical study to reduce liver fat content, as well as improve metabolic parameters associated with Nonalcoholic steatohepatitis (NASH). Aramchol is in Phase IIb clinical trials.

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