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

Insider and Institutional Ownership

72.6% of Vitae Pharmaceuticals shares are held by institutional investors. Comparatively, 28.0% of Kadmon shares are held by institutional investors. 14.8% of Vitae Pharmaceuticals shares are held by insiders. Comparatively, 8.4% of Kadmon shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Vitae Pharmaceuticals and Kadmon, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vitae Pharmaceuticals 0 0 0 0 N/A
Kadmon 1 1 2 0 2.25

Kadmon has a consensus target price of $9.75, indicating a potential upside of 171.59%. Given Kadmon’s higher possible upside, analysts plainly believe Kadmon is more favorable than Vitae Pharmaceuticals.

Profitability

This table compares Vitae Pharmaceuticals and Kadmon’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vitae Pharmaceuticals -318,350.20% -53.70% -49.85%
Kadmon -555.91% N/A -124.91%

Earnings & Valuation

This table compares Vitae Pharmaceuticals and Kadmon’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Vitae Pharmaceuticals N/A N/A N/A ($1.92) -10.94
Kadmon $26.06 million 10.83 -$208.75 million ($1.75) -2.05

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

Summary

Kadmon beats Vitae Pharmaceuticals on 6 of the 9 factors compared between the two stocks.

About Vitae Pharmaceuticals

Vitae Pharmaceuticals, Inc. is a biotechnology company. The Company is focused on discovering and developing small molecule drugs for diseases. It is engaged in developing a portfolio of product candidates through Contour, its structure-based drug discovery platform. The Company’s product candidates include VTP- 43742 for the treatment of psoriasis, as well as multiple other autoimmune disorders. The Company completed approximately two Phase I studies with VTP-43742. Its VTP-38543, a second product candidate is in a Phase IIa proof-of-concept clinical trial for the treatment of atopic dermatitis. Its VTP-36951 is for the treatment and prevention of Alzheimer’s disease, or Alzheimer’s. VTP-43742, the Company’s wholly owned clinical candidate in an on-going Phase IIa proof-of-concept trial in psoriasis, is an orally active small molecule inhibitor of Retinoic acid-receptor (RAR)-Related Orphan Receptor gamma-t (RORgt) activity for the treatment of various autoimmune disorders.

About Kadmon

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.

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