DURECT (NASDAQ: DRRX) and Kythera Biopharmaceuticals (NASDAQ:KYTH) are both healthcare companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitabiliy, institutional ownership, risk and dividends.

Institutional & Insider Ownership

52.7% of DURECT shares are owned by institutional investors. 10.3% of DURECT 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.

Valuation and Earnings

This table compares DURECT and Kythera Biopharmaceuticals’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DURECT $14.98 million 16.02 -$32.18 million ($0.25) -6.76
Kythera Biopharmaceuticals N/A N/A N/A N/A N/A

Kythera Biopharmaceuticals has higher revenue, but lower earnings than DURECT.

Analyst Recommendations

This is a summary of recent recommendations and price targets for DURECT and Kythera Biopharmaceuticals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DURECT 0 0 3 0 3.00
Kythera Biopharmaceuticals 0 0 0 0 N/A

DURECT presently has a consensus target price of $3.17, suggesting a potential upside of 87.38%. Given DURECT’s higher possible upside, analysts plainly believe DURECT is more favorable than Kythera Biopharmaceuticals.

Profitability

This table compares DURECT and Kythera Biopharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DURECT -177.67% -561.85% -88.43%
Kythera Biopharmaceuticals -12,900.69% -93.97% -72.56%

Summary

DURECT beats Kythera Biopharmaceuticals on 6 of the 8 factors compared between the two stocks.

DURECT Company Profile

Durect Corporation is a biopharmaceutical company with research and development programs. The Company’s products candidates include DUR-928, oral for metabolic/lipid disorders, and DUR-928, injectable for acute organ injuries. Its other product candidates include POSIMIR (controlled release injection of bupivacaine), REMOXY (oral controlled release oxycodone), ORADUR-ADHD, ELADUR (controlled release injection of bupivicane), Relday (risperidone), ORADUR-based opioid (hydromorphone) and SABER-based ophthalmic. The Company’s ALZET product line consists of miniature, implantable osmotic pumps and accessories used for experimental research in mice, rats and other laboratory animals. The Company also manufactures and sells osmotic pumps used in laboratory research and design; and develops and manufactures a range of standard and custom biodegradable polymers and excipients for pharmaceutical and medical device clients for use as raw materials in their products.

Kythera Biopharmaceuticals Company Profile

KYTHERA Biopharmaceuticals, Inc. (KYTHERA) is a clinical-stage biopharmaceutical company engaged in the discovery, development and commercialization of prescription products for the aesthetic medicine market. The Company’s initial focus is on the facial aesthetics market. The Company’s product candidate is ATX101, an injectable drug in late-stage clinical development for the treatment of submental fullness associated with submental fat, which commonly presents as an undesirable double chin. ATX101 is a formulation of a purified synthetic version of deoxycholic acid. The Company has completed Phase III clinical trials for ATX101 and has made regulatory filings outside the United States, in Canada, Switzerland and Australia.

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