Amarin (NASDAQ: AMRN) and MEI Pharma (NASDAQ:MEIP) are both small-cap healthcare companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.

Profitability

This table compares Amarin and MEI Pharma’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Amarin -43.90% N/A -35.67%
MEI Pharma -8.24% -3.62% -3.33%

Risk and Volatility

Amarin has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500. Comparatively, MEI Pharma has a beta of 1.83, meaning that its share price is 83% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Amarin and MEI Pharma, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Amarin 0 0 3 0 3.00
MEI Pharma 0 0 2 0 3.00

Amarin currently has a consensus target price of $9.00, indicating a potential upside of 107.13%. MEI Pharma has a consensus target price of $6.75, indicating a potential upside of 200.00%. Given MEI Pharma’s higher probable upside, analysts plainly believe MEI Pharma is more favorable than Amarin.

Valuation & Earnings

This table compares Amarin and MEI Pharma’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Amarin $130.08 million 9.05 -$86.35 million ($0.27) -16.09
MEI Pharma $23.25 million 3.58 $2.67 million ($0.05) -45.00

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

Institutional and Insider Ownership

40.1% of Amarin shares are held by institutional investors. Comparatively, 23.2% of MEI Pharma shares are held by institutional investors. 3.7% of Amarin shares are held by company insiders. Comparatively, 5.3% of MEI Pharma shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

MEI Pharma beats Amarin on 7 of the 13 factors compared between the two stocks.

Amarin Company Profile

Amarin Corporation plc is a biopharmaceutical company with operations in lipid science focused on the commercialization and development of therapeutics for cardiovascular health. The Company operates through the development and commercialization of Vascepa segment. The Company’s lead product, Vascepa (icosapent ethyl) capsule, is approved by the United States Food and Drug Administration (FDA) for use as an adjunct to diet to reduce triglyceride levels in adult patients with severe hypertriglyceridemia. This indication for Vascepa, known as the MARINE indication, is based primarily on the results from the MARINE study of Vascepa in this approved patient population. The Company sells Vascepa principally to wholesalers, as well as selected regional wholesalers and specialty pharmacy providers, or collectively, its distributors, which in turn resell Vascepa to retail pharmacies for resale to patients and healthcare providers.

MEI Pharma Company Profile

MEI Pharma, Inc. is an oncology company. The Company is focused on the clinical development of drugs and therapies for treatment of cancer. The Company’s portfolio of clinical drug candidates includes Pracinostat, ME-344 and PWT143. Pracinostat is an orally available histone deacetylase (HDAC) inhibitor indicated for the treatment of advanced hematologic diseases, such as acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS). ME-344 is an isoflavone-based mitochondrial inhibitor targeting a mitochondrial component of the terminal respiratory chain complex in rapidly proliferating cells. PWT143 is an oral inhibitor of phosphatidylinositide 3-kinase (PI3K) delta, a molecular target that plays a critical role in the proliferation and survival of hematologic cancer cells. Pracinostat has been tested in multiple Phase I and Phase II clinical trials in advanced hematologic malignancies and solid tumor indications.

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