Critical Review: Horizon Pharma (HZNP) versus SciClone Pharmaceuticals (SCLN)

Horizon Pharma (NASDAQ: HZNP) and SciClone Pharmaceuticals (NASDAQ:SCLN) are both medical companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Valuation & Earnings

This table compares Horizon Pharma and SciClone Pharmaceuticals’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Horizon Pharma $981.12 million 2.51 -$166.83 million ($3.05) -4.92
SciClone Pharmaceuticals N/A N/A N/A $0.86 12.97

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

Profitability

This table compares Horizon Pharma and SciClone Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Horizon Pharma -45.28% 20.22% 5.35%
SciClone Pharmaceuticals 27.39% 20.24% 18.42%

Insider and Institutional Ownership

86.6% of Horizon Pharma shares are owned by institutional investors. Comparatively, 72.8% of SciClone Pharmaceuticals shares are owned by institutional investors. 3.2% of Horizon Pharma shares are owned by insiders. Comparatively, 5.2% of SciClone Pharmaceuticals shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Horizon Pharma and SciClone Pharmaceuticals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Horizon Pharma 0 2 9 0 2.82
SciClone Pharmaceuticals 0 1 0 0 2.00

Horizon Pharma currently has a consensus target price of $18.64, indicating a potential upside of 24.24%. SciClone Pharmaceuticals has a consensus target price of $14.00, indicating a potential upside of 25.56%. Given SciClone Pharmaceuticals’ higher possible upside, analysts plainly believe SciClone Pharmaceuticals is more favorable than Horizon Pharma.

Summary

SciClone Pharmaceuticals beats Horizon Pharma on 6 of the 10 factors compared between the two stocks.

Horizon Pharma Company Profile

Horizon Pharma Public Limited Company is a biopharmaceutical company. The Company is focused on identifying, developing, acquiring and commercializing differentiated and accessible medicines that address unmet medical needs. As of December 31, 2016, the Company marketed 11 medicines through its orphan, rheumatology and primary care business units. The Company’s marketed medicines are ACTIMMUNE (interferon gamma-1b), BUPHENYL (sodium phenylbutyrate) Tablets and Powder, DUEXIS (ibuprofen/famotidine), KRYSTEXXA (pegloticase), MIGERGOT (ergotamine tartrate & caffeine suppositories), PENNSAID (diclofenac sodium topical solution) 2% weight per weight (w/w), or PENNSAID 2%, PROCYSBI (cysteamine bitartrate) delayed-release capsules, QUINSAIR (aerosolized form of levofloxacin), RAVICTI (glycerol phenylbutyrate) Oral Liquid, RAYOS (prednisone) delayed-release tablets and VIMOVO (naproxen/esomeprazole magnesium).

SciClone Pharmaceuticals Company Profile

SciClone Pharmaceuticals, Inc. is a pharmaceutical company. The Company’s product portfolio of therapies includes oncology, infectious diseases and cardiovascular disorders. The Company’s business is focused primarily in the People’s Republic of China. The Company operates in two segments: China and the Rest of the World, including its operations in the United States and Hong Kong. The Company’s lead product ZADAXIN (thymalfasin) is approved in over 30 countries, which is used for the treatment of hepatitis B virus (HBV), hepatitis C virus (HCV), and certain cancers according to the local regulatory approvals, and for use as an immune system enhancer. In addition to ZADAXIN, SciClone markets seven partnered and in-licensed products in China. The Company sells ZADAXIN in various international markets through its subsidiary, SciClone Pharmaceuticals International Ltd. (SPIL). Its development portfolio includes Angiomax, Loramyc, Neucardin, VIBATIV and Cleviprex.

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