Retrophin (RTRX) vs. Lipocine (LPCN) Critical Analysis

Retrophin (NASDAQ: RTRX) and Lipocine (NASDAQ:LPCN) are both small-cap medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, earnings, profitability, institutional ownership, dividends, analyst recommendations and valuation.

Insider & Institutional Ownership

22.1% of Lipocine shares are owned by institutional investors. 2.9% of Retrophin shares are owned by insiders. Comparatively, 11.3% of Lipocine shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Retrophin and Lipocine’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Retrophin -33.79% -10.13% -5.94%
Lipocine N/A -74.63% -68.41%

Analyst Recommendations

This is a summary of recent recommendations for Retrophin and Lipocine, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Retrophin 0 0 2 0 3.00
Lipocine 0 1 3 0 2.75

Retrophin currently has a consensus price target of $44.00, suggesting a potential upside of 100.82%. Lipocine has a consensus price target of $13.50, suggesting a potential upside of 980.00%. Given Lipocine’s higher probable upside, analysts plainly believe Lipocine is more favorable than Retrophin.

Risk and Volatility

Retrophin has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Lipocine has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500.

Valuation and Earnings

This table compares Retrophin and Lipocine’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Retrophin $133.59 million 6.45 -$47.90 million ($1.51) -14.51
Lipocine N/A N/A -$18.97 million ($0.95) -1.32

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

Summary

Lipocine beats Retrophin on 7 of the 12 factors compared between the two stocks.

Retrophin Company Profile

Retrophin, Inc. is a biopharmaceutical company. The Company is focused on the development, acquisition and commercialization of therapies for the treatment of serious, catastrophic or rare diseases. The Company sells three products, including Chenodal (chenodeoxycholic acid), Cholbam (cholic acid) and Thiola (tiopronin). Its Chenodal is approved in the United States for the treatment of patients suffering from gallstones in whom surgery poses an unacceptable health risk due to disease or advanced age. Chenodal has also been care for cerebrotendinous xanthomatosis (CTX) patients. Its Cholbam is approved in the United States for the treatment of bile acid synthesis disorders due to single enzyme defects and is further indicated for adjunctive treatment of patients with peroxisomal disorders. Its Thiola is approved in the United States for the prevention of cystine (kidney) stone formation in patients with severe homozygous cystinuria.

Lipocine Company Profile

Lipocine Inc. is a specialty pharmaceutical company. The Company is focused on applying its oral drug delivery technology for the development of pharmaceutical products in the area of men’s and women’s health. Its primary development programs are based on oral delivery solutions for bioavailable drugs. Its lead product candidate, LPCN 1021, is an oral testosterone replacement therapy (TRT), designed for twice-a-day dosing and is in Phase III testing. The Company’s additional pipeline candidates include LPCN 1111, an oral testosterone therapy product targeted for once daily dosing, which is in Phase II testing, and LPCN 1107, an oral therapy for the prevention of preterm birth, which is in Phase I testing. These products are based on its Lip’ral promicellar drug delivery technology platform. Lip’ral promicellar technology is a technology based on lipidic compositions, which form an optimal dispersed phase in the gastrointestinal environment for improved absorption of insoluble drugs.

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