Sorrento Therapeutics (NASDAQ: SRNE) and La Jolla Pharmaceutical Company (NASDAQ:LJPC) are both small-cap medical companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, risk, earnings, profitabiliy, valuation and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Sorrento Therapeutics and La Jolla Pharmaceutical Company, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sorrento Therapeutics 0 0 5 0 3.00
La Jolla Pharmaceutical Company 0 0 6 0 3.00

Sorrento Therapeutics currently has a consensus price target of $15.80, indicating a potential upside of 690.00%. La Jolla Pharmaceutical Company has a consensus price target of $45.20, indicating a potential upside of 70.18%. Given Sorrento Therapeutics’ higher possible upside, research analysts clearly believe Sorrento Therapeutics is more favorable than La Jolla Pharmaceutical Company.

Profitability

This table compares Sorrento Therapeutics and La Jolla Pharmaceutical Company’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sorrento Therapeutics -593.94% -84.07% -21.75%
La Jolla Pharmaceutical Company -12,692.37% -89.72% -78.46%

Earnings & Valuation

This table compares Sorrento Therapeutics and La Jolla Pharmaceutical Company’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sorrento Therapeutics $12.04 million 12.51 -$67.94 million ($1.50) -1.33
La Jolla Pharmaceutical Company $381,999.00 1,538.19 -$84.24 million ($4.83) -5.50

Sorrento Therapeutics has higher revenue and earnings than La Jolla Pharmaceutical Company. La Jolla Pharmaceutical Company is trading at a lower price-to-earnings ratio than Sorrento Therapeutics, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Sorrento Therapeutics has a beta of 1.58, suggesting that its share price is 58% more volatile than the S&P 500. Comparatively, La Jolla Pharmaceutical Company has a beta of 1.6, suggesting that its share price is 60% more volatile than the S&P 500.

Insider & Institutional Ownership

17.7% of Sorrento Therapeutics shares are owned by institutional investors. 7.6% of Sorrento Therapeutics shares are owned by company insiders. Comparatively, 26.4% of La Jolla Pharmaceutical Company shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Sorrento Therapeutics beats La Jolla Pharmaceutical Company on 8 of the 12 factors compared between the two stocks.

About Sorrento Therapeutics

Sorrento Therapeutics, Inc. is a biopharmaceutical company. The Company is engaged in the discovery, acquisition, development and commercialization of drug therapeutics. Its primary therapeutic focus is oncology, including the treatment of chronic cancer pain. It is also developing therapeutic products for other indications, including immunology and infectious diseases. Its products in the pipeline include Chimeric Antigen Receptor-T Cell (CAR-T) programs, resiniferatoxin (RTX), and biosimilar/biobetter antibodies clinical development programs. Its pipeline also includes preclinical fully human therapeutic monoclonal antibodies (mAbs), including biosimilars/biobetters, fully human anti-PD-L1 and anti-PD-1 checkpoint inhibitors derived from its G-MAB library platform, antibody drug conjugates (ADCs), bispecific antibodies (BsAbs), as well as CAR-T and Chimeric Antigen Receptor Natural Killer (NK) cells (CAR. NK) for adoptive cellular immunotherapy.

About La Jolla Pharmaceutical Company

La Jolla Pharmaceutical Company is a biopharmaceutical company. The Company is focused on the discovery, development and commercialization of therapies to improve outcomes in patients suffering from life-threatening diseases. LJPC-501 is its formulation of angiotensin II for the potential treatment of catecholamine-resistant hypotension (CRH). It has initiated a Phase III trial of LJPC-501 for the treatment of CRH, called the Angiotensin II for the Treatment of High-Output Shock 3 (ATHOS) Phase III trial. LJPC-401 is its formulation of synthetic human hepcidin for the potential treatment of conditions characterized by iron overload, such as hereditary hemochromatosis, beta thalassemia, sickle cell disease and myelodysplastic syndrome. LJPC-30S is its next-generation gentamicin derivative program that is focused on therapeutics for the potential treatment of serious bacterial infections, as well as rare genetic disorders, such as cystic fibrosis and Duchenne muscular dystrophy.

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