Halozyme Therapeutics (NASDAQ: HALO) and Egalet (NASDAQ:EGLT) are both medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

84.5% of Halozyme Therapeutics shares are owned by institutional investors. Comparatively, 54.2% of Egalet shares are owned by institutional investors. 16.8% of Halozyme Therapeutics shares are owned by company insiders. Comparatively, 3.8% of Egalet 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 recent recommendations and price targets for Halozyme Therapeutics and Egalet, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Halozyme Therapeutics 1 3 3 0 2.29
Egalet 0 1 4 0 2.80

Halozyme Therapeutics presently has a consensus target price of $18.00, suggesting a potential downside of 8.21%. Egalet has a consensus target price of $7.10, suggesting a potential upside of 582.69%. Given Egalet’s stronger consensus rating and higher possible upside, analysts clearly believe Egalet is more favorable than Halozyme Therapeutics.

Earnings and Valuation

This table compares Halozyme Therapeutics and Egalet’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Halozyme Therapeutics $146.69 million 19.03 -$103.02 million ($0.68) -28.84
Egalet $16.96 million 2.64 -$90.63 million ($3.39) -0.31

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

Volatility & Risk

Halozyme Therapeutics has a beta of 2.09, suggesting that its stock price is 109% more volatile than the S&P 500. Comparatively, Egalet has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500.

Profitability

This table compares Halozyme Therapeutics and Egalet’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Halozyme Therapeutics -53.17% -892.57% -29.67%
Egalet -376.62% -607.49% -73.83%

Summary

Halozyme Therapeutics beats Egalet on 8 of the 13 factors compared between the two stocks.

About Halozyme Therapeutics

Halozyme Therapeutics, Inc. is a biotechnology company focused on developing and commercializing oncology therapies. The Company operates in research, development and commercialization of human enzymes and other drug candidates. The Company’s segment also includes research and development activities and product sales of Hylenex recombinant. The Company’s development pipeline consists of clinical-stage product candidates in oncology. Its lead oncology program is PEGPH20 (polyethylene glycol (PEG)ylated recombinant human hyaluronidase), a molecular entity being developed for the systemic treatment of tumors, which accumulate HA. It is in Phase II and Phase III clinical testing for PEGPH20 in stage IV pancreatic ductal adenocarcinoma (Studies 109-202 and 109-301); Phase Ib clinical testing in non-small cell lung cancer (Study 107-201), and in Phase Ib clinical testing in non-small cell lung cancer and gastric cancer (Study 107-101).

About Egalet

Egalet Corporation is a specialty pharmaceutical company. The Company is engaged in developing, manufacturing and commercializing treatments for pain and other conditions. The Company’s products include OXAYDO and SPRIX Nasal Spray. The Company is developing two late-stage product candidates, ARYMO ER and Egalet-002 using Guardian Technology. The Company’s product SPRIX Nasal Spray, which contains ketorolac tromethamine is a non-steroidal anti-inflammatory drug (NSAID) indicated in adult patients for the short-term management of moderate to moderately severe pain that requires analgesia at the opioid level. The Company’s product OXAYDO is an approved immediate-release (IR) oxycodone product formulated to deter abuse through snorting. The Company’s product candidate, ARYMO ER is an abuse-deterrent (AD), extended-release (ER), oral morphine formulation. The Company’s product candidate, Egalet-002, is an abuse-deterrent, extended-release, oral oxycodone formulation.

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