Theravance Biopharma (NASDAQ: TBPH) and Sophiris Bio (NASDAQ:SPHS) are both small-cap medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, dividends, institutional ownership, profitability and analyst recommendations.

Valuation & Earnings

This table compares Theravance Biopharma and Sophiris Bio’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Theravance Biopharma $48.65 million 30.10 -$190.66 million ($5.17) -5.24
Sophiris Bio N/A N/A -$11.16 million ($0.13) -18.77

Sophiris Bio has lower revenue, but higher earnings than Theravance Biopharma. Sophiris Bio is trading at a lower price-to-earnings ratio than Theravance Biopharma, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and target prices for Theravance Biopharma and Sophiris Bio, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Theravance Biopharma 1 0 5 0 2.67
Sophiris Bio 0 0 4 0 3.00

Theravance Biopharma presently has a consensus price target of $42.67, indicating a potential upside of 57.62%. Sophiris Bio has a consensus price target of $6.25, indicating a potential upside of 156.15%. Given Sophiris Bio’s stronger consensus rating and higher probable upside, analysts plainly believe Sophiris Bio is more favorable than Theravance Biopharma.

Institutional & Insider Ownership

86.0% of Theravance Biopharma shares are owned by institutional investors. Comparatively, 5.5% of Sophiris Bio shares are owned by institutional investors. 6.1% of Theravance Biopharma shares are owned by insiders. Comparatively, 3.9% of Sophiris Bio shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Theravance Biopharma and Sophiris Bio’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Theravance Biopharma -1,604.87% -99.43% -47.10%
Sophiris Bio N/A -85.20% -38.89%

Risk & Volatility

Theravance Biopharma has a beta of 2.1, indicating that its share price is 110% more volatile than the S&P 500. Comparatively, Sophiris Bio has a beta of 2.03, indicating that its share price is 103% more volatile than the S&P 500.

Summary

Sophiris Bio beats Theravance Biopharma on 7 of the 13 factors compared between the two stocks.

Theravance Biopharma Company Profile

Theravance Biopharma, Inc. is a biopharmaceutical company. The Company is engaged in creating medicines for patients suffering from serious illness. The Company operates in the segment of discovery (research), development and commercialization of human therapeutics. The Company’s pipeline of internally discovered product candidates includes medicines to address the unmet needs of patients being treated for serious conditions primarily in the acute care setting. Its commercial product VIBATIV (telavancin) is a once-daily dual-mechanism antibiotic approved in the United States and Europe for certain difficult-to-treat infections. Its Revefenacin (TD-4208) is a long-acting muscarinic antagonist (LAMA) being developed as a nebulized treatment for chronic obstructive pulmonary disease. Its neprilysin (NEP) inhibitor program is designed to develop selective NEP inhibitors for the treatment of a range of cardiovascular and renal diseases.

Sophiris Bio Company Profile

Sophiris Bio, Inc., formerly Protox Therapeutics Inc., is a Canada-based biopharmaceutical company focused on the research, development and commercialization of products for the treatment of urological diseases. The Company has operations based in San Diego developing a treatment for benign prostatic hyperplasia (benign prostatic hyperplasia (BPH) or enlarged prostate). The Company has partnered with Kissei Pharmaceuticals for the development and commercialization of PRX302 in Japan. Sophiris Bio, Inc. is advancing a pipeline of receptor targeted fusion proteins based on three complementary technology platforms: PORxin, INxin and HUMxin. It focuses on diseases of the prostate via its PORxin platform candidate, PRX302, which has completed three clinical trials for the treatment of BPH, as well as two clinical trials for the treatment of localized recurrent prostate cancer.

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