Two healthcare companies hitting new highs recently are Spectrum Pharmaceuticals (NASDAQ:$SPPI) and PTC Therapeutics (NASDAQ:$PTCT). However, where do you start when weighing them against each other? Let’s look at the stats.
Spectrum Pharmaceuticals is a biotechnology company that develops and commercializes hematology and oncological drugs. The company currently boasts six approved oncology/hematology products that target different types of cancer across both the commercial and developmental stages.
Likewise, PTC Therapeutics is a biopharmaceutical company that discovers, develops and commercializes medications, specifically in the treatment of ribonucleic acid biology. Its products include PTC596, an orally active small molecule that targets tumor cell populations, RNG7916, an investigational oral therapy for the treatment of onset spinal muscular atrophy, and Ataluren, which is used to treat Duchenne muscular dystrophy and cystic fibrosis.
The Stats
Over the last 5 years, PTC has had sales growth of a -4.70% annual rate, and a net profit margin of -88.40%. This shows that the company is less profitable than most of its competitors. They also have an asset turnover ratio of 0.41, a financial leverage ratio of 1.26, and a Return on Equity of -81.80%, which is significantly worse than the biotechnology industry average. Wall Street analysts have pegged PTC at a ‘Hold’ rating on average.
Spectrum Pharmaceuticals, on the other hand, has increased sales at a -5.40% CAGR over the past 5 years. It is considered a low growth stock. The company is less profitable than the average biotechnology firm with a net profit margin of -59.30%. They also are mostly financed by equity capital due to an asset turnover ratio of 0.31 and a financial leverage of 0.99. The company’s return on equity is -34.70% below the industry average. However, the company sits at a ‘Buy’ rating according to most analysts.
The free cash flow yield of PTC sits at 1.78, which is a measure of cash available to investors before a dividend. This means that higher free cash flow yields tend to indicate a cheaper stock.
Insider Trends
PTC has shows net buyers with a total of 0 shares over the past 3 months, indicating a bearish outlook by insiders. PTC’s beta, on the other hand, is 1.37. This means that PTC is operating slightly above average market volatility.
Also over the past 3 months, Spectrum has seen a total of 32,176 shares sold. This would indicate that insiders at Spectrum are feeling a bit bearish about the company’s outlook. Meanwhile, they sit at a beta of 1.48, slightly higher than PTC and indicating a greater volatility than the market average.
The Bottom Line
Spectrum loses to PTC on the majority of categories considered. This would indicate that PTC is the better investment. The company has better fundamentals, insider activity, sentiment signals, and scores higher on the growth and efficiency metrics.
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