Alkermes PLC (NASDAQ: ALKS) and OncoMed Pharmaceuticals (NASDAQ:OMED) are both medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitabiliy, dividends, institutional ownership, risk, valuation, analyst recommendations and earnings.

Institutional and Insider Ownership

97.8% of Alkermes PLC shares are owned by institutional investors. Comparatively, 44.5% of OncoMed Pharmaceuticals shares are owned by institutional investors. 5.3% of Alkermes PLC shares are owned by company insiders. Comparatively, 32.8% of OncoMed Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Alkermes PLC and OncoMed Pharmaceuticals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alkermes PLC 0 4 5 0 2.56
OncoMed Pharmaceuticals 0 6 2 0 2.25

Alkermes PLC presently has a consensus price target of $64.00, indicating a potential upside of 11.17%. OncoMed Pharmaceuticals has a consensus price target of $7.71, indicating a potential upside of 115.48%. Given OncoMed Pharmaceuticals’ higher possible upside, analysts plainly believe OncoMed Pharmaceuticals is more favorable than Alkermes PLC.

Valuation and Earnings

This table compares Alkermes PLC and OncoMed Pharmaceuticals’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Alkermes PLC $780.70 million 11.30 -$107.34 million ($1.31) -43.95
OncoMed Pharmaceuticals $25.02 million 5.38 -$97.14 million ($2.89) -1.24

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

Profitability

This table compares Alkermes PLC and OncoMed Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alkermes PLC -25.61% -9.76% -6.85%
OncoMed Pharmaceuticals -393.74% N/A -52.89%

Risk and Volatility

Alkermes PLC has a beta of 2.23, suggesting that its share price is 123% more volatile than the S&P 500. Comparatively, OncoMed Pharmaceuticals has a beta of 2.9, suggesting that its share price is 190% more volatile than the S&P 500.

Summary

Alkermes PLC beats OncoMed Pharmaceuticals on 8 of the 13 factors compared between the two stocks.

Alkermes PLC Company Profile

Alkermes plc is a biopharmaceutical company. The Company is engaged in the researching, developing and commercializing pharmaceutical products that are designed to address medical needs of patients in therapeutic areas. The Company has a portfolio of marketed drug products and a clinical pipeline of products that address central nervous system (CNS) disorders, such as schizophrenia, depression, addiction and multiple sclerosis (MS). The Company’s products include ARISTADA, VIVITROL, INVEGA SUSTENNA, XEPLION, INVEGA TRINZA, TREVICTA, RISPERDAL CONSTA, AMPYRA, FAMPYRA, BYDUREON, Aripiprazole lauroxil, ALKS 5461, ALKS 3831, ALKS 8700, ALKS 6428, ALKS 4230 and ALKS 7119. The Company’s product platforms include injectable extended-release microsphere technology, LinkeRx technology, NanoCrystal technology and oral controlled release (OCR) technology. ARISTADA is an extended-release intramuscular injectable suspension for the treatment of schizophrenia.

OncoMed Pharmaceuticals Company Profile

OncoMed Pharmaceuticals, Inc. (OncoMed) is a clinical-stage biopharmaceutical company. The Company focuses on discovering and developing therapeutics that address the fundamental biology driving cancer’s growth, resistance, recurrence and metastasis. The Company’s therapeutic candidates and preclinical programs include Demcizumab (Anti-DLL4, OMP-21M18), Tarextumab (Anti-Notch2/3, OMP-59R5), Vantictumab (anti-Fzd7, OMP-18R5), Ipafricept (Fzd8-Fc, OMP-54F28), Brontictuzumab (Anti-Notch1, OMP-52M51), Navicixizumab (Anti-DLL4/VEGF Bispecific, OMP-305B83), Anti-RSPO3 (OMP-131R10), Anti-TIGIT (OMP-313M32) and GITRL-Fc trimer (OMP-336B11). Demcizumab is a humanized monoclonal antibody that inhibits Delta-like Ligand 4 (DLL4) in the Notch signaling pathway. Tarextumab is a human monoclonal antibody that binds to both the Notch2 and Notch3 receptors.

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