Rigel Pharmaceuticals (NASDAQ: RIGL) and Tocagen (NASDAQ:TOCA) are both small-cap medical companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Rigel Pharmaceuticals and Tocagen, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rigel Pharmaceuticals 0 0 4 0 3.00
Tocagen 0 0 2 0 3.00

Rigel Pharmaceuticals presently has a consensus price target of $5.75, suggesting a potential upside of 61.52%. Tocagen has a consensus price target of $23.67, suggesting a potential upside of 115.15%. Given Tocagen’s higher possible upside, analysts clearly believe Tocagen is more favorable than Rigel Pharmaceuticals.

Profitability

This table compares Rigel Pharmaceuticals and Tocagen’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rigel Pharmaceuticals -354.14% -102.26% -80.57%
Tocagen -89,078.05% N/A -51.70%

Insider and Institutional Ownership

74.5% of Rigel Pharmaceuticals shares are owned by institutional investors. Comparatively, 36.2% of Tocagen shares are owned by institutional investors. 5.2% of Rigel Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Rigel Pharmaceuticals and Tocagen’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rigel Pharmaceuticals $20.38 million 25.59 -$69.21 million ($0.59) -6.03
Tocagen $40,000.00 5,447.75 -$33.47 million N/A N/A

Tocagen has lower revenue, but higher earnings than Rigel Pharmaceuticals.

Rigel Pharmaceuticals Company Profile

Rigel Pharmaceuticals, Inc. is a clinical-stage biotechnology company. The Company is engaged in the discovering, developing and providing novel small molecule drugs that improve the lives of patients with immune and hematological disorders, cancer and rare diseases. The Company’s pioneering research focuses on signaling pathways that are critical to disease mechanisms. The Company’s clinical programs include clinical trials of fostamatinib, an oral spleen tyrosine kinase (SYK) inhibitor, in a number of indications. The Company has submitted a new drug application (NDA) to the United States food and drug administration (FDA) for fostamatinib in patients with chronic or persistent immune thrombocytopenia (ITP). In addition, the Company has product candidates in development with partners BerGenBio AS, Daiichi Sankyo and Aclaris Therapeutics. The Company is engaged in conducting research in the disease areas of inflammation/immunology and muscle wasting/muscle endurance.

Tocagen Company Profile

Tocagen Inc. (Tocagen) is a clinical-stage, cancer-selective gene therapy company. The Company is focused on developing product candidates designed to activate a patient’s immune system against their own cancer. Its cancer-selective gene therapy platform is built on retroviral replicating vectors (RRVs), which are designed to selectively deliver therapeutic genes into the deoxyribonucleic acid (DNA) of cancer cells. Its lead product candidates are vocimagene amiretrorepvec (Toca 511) and flucytosine extended release (Toca FC). Toca 511 is an investigational injectable retroviral replicating vector (RRV) that encodes a prodrug activator enzyme, cytosine deaminase (CD). Toca FC is an investigational extended-release version of 5-fluorocytosine (5-FC), a prodrug that is inactive as an anti-cancer drug. As of February, 2017, Tocagen has completed enrollment of the Phase II portion with 187 patients.

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