Critical Review: Achaogen (AKAO) vs. Nexvet Biopharma (NASDAQ:NVET)

Nexvet Biopharma (NASDAQ: NVET) and Achaogen (NASDAQ:AKAO) are both small-cap healthcare companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Nexvet Biopharma and Achaogen, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nexvet Biopharma 0 1 0 0 2.00
Achaogen 0 1 9 0 2.90

Nexvet Biopharma currently has a consensus target price of $6.72, indicating a potential upside of 0.00%. Achaogen has a consensus target price of $25.44, indicating a potential upside of 104.87%. Given Achaogen’s stronger consensus rating and higher possible upside, analysts clearly believe Achaogen is more favorable than Nexvet Biopharma.

Insider and Institutional Ownership

48.4% of Nexvet Biopharma shares are held by institutional investors. Comparatively, 85.7% of Achaogen shares are held by institutional investors. 37.0% of Nexvet Biopharma shares are held by company insiders. Comparatively, 8.4% of Achaogen shares are held 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.

Profitability

This table compares Nexvet Biopharma and Achaogen’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nexvet Biopharma N/A -102.72% -89.82%
Achaogen -593.61% -80.44% -51.17%

Earnings and Valuation

This table compares Nexvet Biopharma and Achaogen’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nexvet Biopharma N/A N/A N/A ($1.75) -3.84
Achaogen $41.77 million 12.60 -$71.22 million ($3.36) -3.70

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

Summary

Achaogen beats Nexvet Biopharma on 8 of the 11 factors compared between the two stocks.

About Nexvet Biopharma

Nexvet Biopharma public limited company is a clinical-stage biopharmaceutical company focused on transforming the therapeutic market for companion animals by developing and commercializing species-specific biologics. The Company’s platform technology, which it refers to as PETization, is an algorithmic approach that enables the Company to create monoclonal antibodies (mAbs) a type of biologic, that are designed to be recognized as self or native by an animal’s immune system, a property referred to as 100% species-specificity. PETization is designed to build upon the safety and efficacy data from clinically tested human therapies to create new therapies for companion animals. Biologics generally include mAbs, which are targeted antibodies derived from identical (clonal) cells. The Company’s advanced product candidates are in pivotal-phase development: ranevetmab (or NV-01) and frunevetmab (or NV-02).

About Achaogen

Achaogen, Inc. is a late-stage biopharmaceutical company. The Company is engaged in the discovery, development and commercialization of antibacterial treatments against multi-drug resistant (MDR) gram-negative infections. The Company is involved in researching and developing plazomicin, its lead product candidate, for the treatment of serious bacterial infections, including complicated urinary tract infection (cUTI), blood stream infections and other infections due to MDR Enterobacteriaceae, including carbapenem-resistant Enterobacteriaceae (CRE). Plazomicin is an intravenous aminoglycoside antibiotic. The Company has developed plazomicin by chemically modifying sisomicin, a naturally occurring aminoglycoside, in order to overcome common aminoglycoside resistance mechanisms. The Company has a portfolio of small molecule and antibody programs. The Company’s Early Development programs include C-Scape and LpxC.

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