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

Insider & Institutional Ownership

50.1% of Histogenics Corporation shares are held by institutional investors. Comparatively, 84.8% of Theravance Biopharma shares are held by institutional investors. 23.8% of Histogenics Corporation shares are held by insiders. Comparatively, 6.1% of Theravance Biopharma shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Histogenics Corporation N/A -440.61% -86.43%
Theravance Biopharma -742.59% -78.74% -43.79%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Histogenics Corporation and Theravance Biopharma, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Histogenics Corporation 0 0 2 0 3.00
Theravance Biopharma 1 0 5 0 2.67

Histogenics Corporation currently has a consensus target price of $4.00, indicating a potential upside of 95.12%. Theravance Biopharma has a consensus target price of $43.00, indicating a potential upside of 22.68%. Given Histogenics Corporation’s stronger consensus rating and higher possible upside, research analysts clearly believe Histogenics Corporation is more favorable than Theravance Biopharma.

Risk & Volatility

Histogenics Corporation has a beta of 1.43, suggesting that its share price is 43% more volatile than the S&P 500. Comparatively, Theravance Biopharma has a beta of 2.24, suggesting that its share price is 124% more volatile than the S&P 500.

Earnings and Valuation

This table compares Histogenics Corporation and Theravance Biopharma’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Histogenics Corporation N/A N/A -$25.96 million ($1.85) -1.11
Theravance Biopharma $31.36 million 60.16 -$211.25 million ($4.63) -7.57

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

About Histogenics Corporation

Histogenics Corporation is a regenerative medicine company. The Company is focused on developing and commercializing products in the musculoskeletal segment of the marketplace. The Company’s product candidate, NeoCart utilizes various aspects of regenerative medicine platform to develop a tissue implant intended to treat tissue injury in the field of orthopedics, specifically cartilage damage in the knee. NeoCart is a cartilage-like implant created using a patient’s own cartilage cells through a series of tissue engineering processes. The patient’s cells are separated from a tissue biopsy specimen extracted from the patient and multiplied in its laboratory. The cells are then infused into its scaffold that provides structure for the developing implant. Before NeoCart is implanted in a patient, the cell- and scaffold construct undergoes a bioengineering process in the Company’s Tissue Engineering Processor (TEP). The Company has operations in the United States and Israel.

About Theravance Biopharma

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.

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