The Medicines Company (NASDAQ: MDCO) and Zynerba Pharmaceuticals (NASDAQ:ZYNE) are both medical companies, but which is the superior business? We will compare the two businesses based on the strength of their profitabiliy, valuation, risk, institutional ownership, earnings, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for The Medicines Company and Zynerba Pharmaceuticals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Medicines Company 0 2 9 0 2.82
Zynerba Pharmaceuticals 0 0 8 0 3.00

The Medicines Company presently has a consensus target price of $56.11, suggesting a potential upside of 46.66%. Zynerba Pharmaceuticals has a consensus target price of $32.25, suggesting a potential upside of 84.60%. Given Zynerba Pharmaceuticals’ stronger consensus rating and higher probable upside, analysts clearly believe Zynerba Pharmaceuticals is more favorable than The Medicines Company.

Institutional & Insider Ownership

30.4% of Zynerba Pharmaceuticals shares are owned by institutional investors. 7.9% of The Medicines Company shares are owned by insiders. Comparatively, 10.0% of Zynerba Pharmaceuticals shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares The Medicines Company and Zynerba Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Medicines Company -91.25% -19.09% -7.60%
Zynerba Pharmaceuticals N/A -62.41% -54.55%

Volatility & Risk

The Medicines Company has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, Zynerba Pharmaceuticals has a beta of 5.17, meaning that its share price is 417% more volatile than the S&P 500.

Earnings and Valuation

This table compares The Medicines Company and Zynerba Pharmaceuticals’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Medicines Company $141.74 million 19.18 -$306.00 million ($1.90) -20.14
Zynerba Pharmaceuticals N/A N/A -$26.59 million ($2.68) -6.52

Zynerba Pharmaceuticals has higher revenue, but lower earnings than The Medicines Company. The Medicines Company is trading at a lower price-to-earnings ratio than Zynerba Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.

Summary

Zynerba Pharmaceuticals beats The Medicines Company on 7 of the 12 factors compared between the two stocks.

About The Medicines Company

The Medicines Company is a global biopharmaceutical company. The Company is focused on advancing the treatment of acute and intensive care patients through the delivery of medicines to the hospital marketplace around the world. It markets Angiomax (bivalirudin), Ionsys (fentanyl iontophoretic transdermal system), Minocin (minocycline) for injection and Orbactiv (oritavancin). It also has a pipeline of products in development, including Carbavance, inclisiran and MDCO-700. Carbavance is used for the treatment of hospitalized patients with gram-negative bacterial infections. Inclisiran is used for the treatment of hypercholesterolemia. MDCO-700 includes sedative-hypnotic, which is used to induce and maintain sedation for procedural care and general anesthesia for surgical care. In addition to these products and products in development, it has a portfolio of generic drugs.

About Zynerba Pharmaceuticals

Zynerba Pharmaceuticals, Inc. is a specialty pharmaceutical company. The Company is engaged in developing and commercializing transdermal synthetic cannabinoid treatments for patients with high unmet needs. Its development pipeline includes two product candidates: ZYN002 and ZYN001. ZYN002 is a synthetic cannabidiol (CBD), which is a non-psychoactive cannabinoid, formulated as a patent-protected permeation-enhanced gel for transdermal delivery through the skin and into the circulatory system. ZYN002 is in Phase II clinical development in patients with refractory epilepsy, in patients with osteoarthritis of the knee, as well as in patients with Fragile X syndrome. ZYN001 is a pro-drug of tetrahydrocannabinol (THC) that enables transdermal delivery through the skin and into the circulatory system through a patch. ZYN001 is targeting two pain indications, fibromyalgia and peripheral neuropathic pain.

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