Ariad Pharmaceuticals (NASDAQ: ARIA) and Sucampo Pharmaceuticals (NASDAQ:SCMP) are both healthcare companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, valuation and risk.

Profitability

This table compares Ariad Pharmaceuticals and Sucampo Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ariad Pharmaceuticals -60.47% N/A -17.16%
Sucampo Pharmaceuticals -60.24% 74.58% 16.85%

Analyst Ratings

This is a breakdown of current ratings and price targets for Ariad Pharmaceuticals and Sucampo Pharmaceuticals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ariad Pharmaceuticals 0 4 1 0 2.20
Sucampo Pharmaceuticals 0 2 5 0 2.71

Ariad Pharmaceuticals presently has a consensus target price of $22.00, indicating a potential downside of 8.30%. Sucampo Pharmaceuticals has a consensus target price of $18.00, indicating a potential upside of 5.88%. Given Sucampo Pharmaceuticals’ stronger consensus rating and higher probable upside, analysts clearly believe Sucampo Pharmaceuticals is more favorable than Ariad Pharmaceuticals.

Valuation and Earnings

This table compares Ariad Pharmaceuticals and Sucampo Pharmaceuticals’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ariad Pharmaceuticals N/A N/A N/A ($0.18) -133.28
Sucampo Pharmaceuticals $230.06 million 3.45 $18.48 million ($3.29) -5.17

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

Insider and Institutional Ownership

87.0% of Ariad Pharmaceuticals shares are owned by institutional investors. Comparatively, 65.3% of Sucampo Pharmaceuticals shares are owned by institutional investors. 8.2% of Ariad Pharmaceuticals shares are owned by company insiders. Comparatively, 4.1% of Sucampo Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Sucampo Pharmaceuticals beats Ariad Pharmaceuticals on 7 of the 10 factors compared between the two stocks.

Ariad Pharmaceuticals Company Profile

ARIAD Pharmaceuticals, Inc. (ARIAD) is an oncology company. The Company is focused on transforming the lives of cancer patients with medicines. The Company’s product pipeline includes Iclusig (ponatinib), brigatinib, AP32788 and ridaforolimus. The Company’s Iclusig is a tyrosine kinase inhibitor (TKI) that is approved in the United States, the European Union, Australia, Switzerland, Israel and Canada for the treatment of adult patients with chronic myeloid leukemia (CML), and Philadelphia chromosome-positive acute lymphoblastic leukemia (Ph+ ALL). Its Brigatinib is an investigational inhibitor of anaplastic lymphoma kinase (ALK). Its AP32788 is a TKI, which is designed as a targeted therapy for patients with non-small cell lung cancer (NSCLC) with specific mutations in two kinases, epidermal growth factor receptor (EGFR), or human epidermal growth factor receptor 2 (HER2). Its Ridaforolimus is an investigational inhibitor of the mammalian target of rapamycin (mTOR).

Sucampo Pharmaceuticals Company Profile

Sucampo Pharmaceuticals, Inc. is a biopharmaceutical company. The Company is focused on the development and commercialization of pharmaceutical products. Its primary focus areas are gastroenterology, ophthalmology and oncology-related disorders. Its product candidates include VTS-270, Lubiprostone (AMITIZA), Unoprostone is opropyl (RESCULA) and CPP-1X/sulindac combination product. VTS-270 is an investigational drug under clinical study for the treatment of Niemann-Pick Disease Type C-1, an ultra-orphan, progressive and fatal disease. AMITIZA is a ClC-2 chloride channel activator, which has been approved for three indications that cover distinct patient types: chronic idiopathic constipation, irritable bowel syndrome with constipation, and opioid-induced constipation. RESCULA is a Big Potassium channel activator used to lower intraocular pressure. CPP-1X/sulindac combination product is meant for the treatment of familial adenomatous polyposis (FAP).

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