Kadmon Holdings (NASDAQ: KDMN) and Ocera Therapeutics (NASDAQ:OCRX) are both small-cap healthcare companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, profitability, institutional ownership, analyst recommendations, risk and valuation.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Kadmon Holdings and Ocera Therapeutics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kadmon Holdings 1 1 4 0 2.50
Ocera Therapeutics 0 2 3 0 2.60

Kadmon Holdings presently has a consensus price target of $9.80, suggesting a potential upside of 166.30%. Ocera Therapeutics has a consensus price target of $4.50, suggesting a potential upside of 294.74%. Given Ocera Therapeutics’ stronger consensus rating and higher probable upside, analysts clearly believe Ocera Therapeutics is more favorable than Kadmon Holdings.

Insider & Institutional Ownership

20.3% of Ocera Therapeutics shares are held by institutional investors. 7.2% of Ocera Therapeutics shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Kadmon Holdings and Ocera Therapeutics’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Kadmon Holdings $18.50 million 10.31 -$97.68 million N/A N/A
Ocera Therapeutics $550,000.00 54.95 -$24.06 million ($1.05) -1.09

Ocera Therapeutics has higher revenue, but lower earnings than Kadmon Holdings.

Profitability

This table compares Kadmon Holdings and Ocera Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kadmon Holdings -754.62% N/A -155.28%
Ocera Therapeutics N/A -175.02% -89.76%

Summary

Ocera Therapeutics beats Kadmon Holdings on 8 of the 11 factors compared between the two stocks.

Kadmon Holdings Company Profile

Kadmon Holdings, Inc. is an integrated biopharmaceutical company engaged in the discovery, development and commercialization of small molecules and biologics to address disease areas of various unmet medical needs. The Company is developing product candidates in a number of indications within autoimmune and fibrotic disease, oncology and genetic diseases. Its product pipeline consists of KD025, Tesevatinib and KD034. The Company’s other products include Ribasphere RibaPak, Ribasphere, Qsymia, Tetrabenazine and Valganciclovir. KD025 is an orally available, selective small molecule inhibitor of Rho-associated coiled-coil kinase 2 (ROCK2), a molecular target in multiple autoimmune, fibrotic and neurodegenerative diseases. Tesevatinib is an oral tyrosine kinase inhibitor (TKI) designed to block key molecular drivers of tumor growth, metastases and drug resistance. KD034 is the Company’s portfolio of enhanced formulations of trientine hydrochloride for the treatment of Wilson’s disease.

Ocera Therapeutics Company Profile

Ocera Therapeutics, Inc. is a clinical-stage biopharmaceutical company. The Company is focused on acute and chronic orphan liver diseases. The Company is focused on the development and commercialization of its clinical candidate, OCR-002, for the treatment of hepatic encephalopathy (HE). OCR-002 is a molecule, ornithine phenylacetate, which functions as an ammonia scavenger. It is conducting a randomized, placebo-controlled double blind Phase IIb clinical trial to evaluate the efficacy of intravenous administration of OCR-002 IV formulation in reducing the severity of HE symptoms among HE patients. The Company also conducted a Phase IIa investigator-sponsored trial of OCR-002 in Spain in patients with upper gastrointestinal bleeding associated with liver cirrhosis. It is developing an oral form of OCR-002 to provide continuity of care for HE patients, where the intravenous form is used for hospital-based acute care and the oral form for chronic maintenance care post discharge.

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