Spero Therapeutics (NASDAQ: SPRO) and Epizyme (NASDAQ:EPZM) are both small-cap medical companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, valuation, analyst recommendations, earnings, institutional ownership and profitability.

Insider and Institutional Ownership

0.0% of Spero Therapeutics shares are held by institutional investors. Comparatively, 86.0% of Epizyme shares are held by institutional investors. 13.9% of Spero Therapeutics shares are held by insiders. Comparatively, 25.2% of Epizyme shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Spero Therapeutics and Epizyme, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Spero Therapeutics 0 1 4 0 2.80
Epizyme 0 1 11 0 2.92

Spero Therapeutics presently has a consensus price target of $27.67, suggesting a potential upside of 132.88%. Epizyme has a consensus price target of $23.00, suggesting a potential upside of 43.75%. Given Spero Therapeutics’ higher possible upside, equities research analysts plainly believe Spero Therapeutics is more favorable than Epizyme.

Profitability

This table compares Spero Therapeutics and Epizyme’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Spero Therapeutics N/A N/A N/A
Epizyme N/A -67.04% -53.15%

Earnings and Valuation

This table compares Spero Therapeutics and Epizyme’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Spero Therapeutics N/A N/A N/A N/A N/A
Epizyme $8.01 million 138.39 -$110.21 million ($2.27) -7.05

Spero Therapeutics has higher earnings, but lower revenue than Epizyme.

Summary

Epizyme beats Spero Therapeutics on 5 of the 8 factors compared between the two stocks.

About Spero Therapeutics

Spero Therapeutics, Inc. is a clinical-stage biopharmaceutical company. The Company is focused on identifying, developing and commercializing novel treatments for MDR bacterial infections. The Company is developing a portfolio of novel product candidates, including SPR994, Potentiator Platform (SPR741 and SPR206), and SPR720. SPR994 is novel oral formulation of tebipenem, a carbapenem-class antibiotic. SPR994 is effective against a broad spectrum of MDR bacterial infections, its initial focus is on the treatment of cUTIs. Potentiator platform that enables to develop drugs that expand the spectrum and potency of existing antibiotics, including inactive antibiotics, against Gram-negative bacteria. SPR720 is novel oral therapy product candidate designed for the treatment of NTM, a rare lung infection often occurring in patients with compromised immune systems, including HIV, or respiratory conditions, such as cystic fibrosis, asthma and bronchiectasis.

About Epizyme

Epizyme, Inc. is a clinical-stage biopharmaceutical company. The Company discovers, develops and plans to commercialize epigenetic therapies for cancer patients. The Company is engaged in the discovery and development of novel epigenetic therapies for cancer patients. The Company develops small molecule inhibitors of a class of enzymes known as histone methyltransferases (HMTs). The Company develops small molecule inhibitors of other chromatin modifying proteins (CMPs). The Company’s lead product candidate, tazemetostat, is a potent and selective inhibitor of the enhancer of zeste homolog 2 (EZH2) histone methyltransferases (HMT), an enzyme that plays an important role in various cancers. The Company is evaluating tazemetostat in a Phase II study in adults with relapsed or refractory non-Hodgkin lymphoma (NHL), and one Phase I study in children with molecularly defined solid tumors. The Company owns the global development and commercialization rights to tazemetostat outside of Japan.

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