Insmed (NASDAQ: INSM) and MEI Pharma (NASDAQ:MEIP) are both small-cap medical companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, earnings, risk, valuation, institutional ownership and profitability.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Insmed and MEI Pharma, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Insmed 0 1 6 0 2.86
MEI Pharma 0 0 2 0 3.00

Insmed currently has a consensus price target of $36.71, indicating a potential upside of 17.52%. MEI Pharma has a consensus price target of $6.75, indicating a potential upside of 159.62%. Given MEI Pharma’s stronger consensus rating and higher probable upside, analysts clearly believe MEI Pharma is more favorable than Insmed.

Valuation and Earnings

This table compares Insmed and MEI Pharma’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Insmed N/A N/A -$180.87 million ($3.03) -10.31
MEI Pharma $23.25 million 4.13 $2.47 million $0.06 43.34

MEI Pharma has higher revenue and earnings than Insmed. Insmed is trading at a lower price-to-earnings ratio than MEI Pharma, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Insmed has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500. Comparatively, MEI Pharma has a beta of 1.59, meaning that its share price is 59% more volatile than the S&P 500.

Insider & Institutional Ownership

73.1% of Insmed shares are owned by institutional investors. Comparatively, 17.9% of MEI Pharma shares are owned by institutional investors. 5.1% of Insmed shares are owned by insiders. Comparatively, 4.6% of MEI Pharma shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Insmed and MEI Pharma’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Insmed N/A -130.41% -85.48%
MEI Pharma 11.48% 5.26% 4.55%

Summary

MEI Pharma beats Insmed on 9 of the 12 factors compared between the two stocks.

Insmed Company Profile

Insmed Incorporated is a biopharmaceutical company. The Company operates through development and commercialization of therapies for patients with rare diseases segment. Its lead product candidate is ARIKAYCE, or liposomal amikacin for inhalation (LAI), which is in late-stage development for adult patients with treatment refractory nontuberculous mycobacteria (NTM) lung disease caused by Mycobacterium avium complex (MAC). Its earlier-stage pipeline includes preclinical compounds that the Company is evaluating in multiple rare diseases of unmet medical need, including methicillin-resistant staph aureus and NTM. Its earlier clinical-stage pipeline includes INS1007 and INS1009. INS1007 is an oral, reversible inhibitor of dipeptidyl peptidase 1. INS1009 is an inhaled nanoparticle formulation of a treprostinil prodrug that may offer a differentiated product profile for rare pulmonary disorders, including pulmonary arterial hypertension. It has completed a Phase I study of INS1009.

MEI Pharma Company Profile

MEI Pharma, Inc. is an oncology company. The Company is focused on the clinical development of drugs and therapies for treatment of cancer. The Company’s portfolio of clinical drug candidates includes Pracinostat, ME-344 and PWT143. Pracinostat is an orally available histone deacetylase (HDAC) inhibitor indicated for the treatment of advanced hematologic diseases, such as acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS). ME-344 is an isoflavone-based mitochondrial inhibitor targeting a mitochondrial component of the terminal respiratory chain complex in rapidly proliferating cells. PWT143 is an oral inhibitor of phosphatidylinositide 3-kinase (PI3K) delta, a molecular target that plays a critical role in the proliferation and survival of hematologic cancer cells. Pracinostat has been tested in multiple Phase I and Phase II clinical trials in advanced hematologic malignancies and solid tumor indications.

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