Head-To-Head Review: Zosano Pharma (ZSAN) and Vertex Pharmaceuticals (VRTX)

Vertex Pharmaceuticals (NASDAQ: VRTX) and Zosano Pharma (NASDAQ:ZSAN) are both healthcare companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, valuation, analyst recommendations, earnings and risk.

Insider and Institutional Ownership

93.1% of Vertex Pharmaceuticals shares are held by institutional investors. Comparatively, 19.4% of Zosano Pharma shares are held by institutional investors. 1.8% of Vertex Pharmaceuticals shares are held by company insiders. Comparatively, 2.8% of Zosano Pharma shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for Vertex Pharmaceuticals and Zosano Pharma, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vertex Pharmaceuticals 0 1 25 0 2.96
Zosano Pharma 0 0 2 0 3.00

Vertex Pharmaceuticals presently has a consensus price target of $175.75, suggesting a potential upside of 10.95%. Zosano Pharma has a consensus price target of $3.50, suggesting a potential upside of 519.14%. Given Zosano Pharma’s stronger consensus rating and higher possible upside, analysts clearly believe Zosano Pharma is more favorable than Vertex Pharmaceuticals.

Profitability

This table compares Vertex Pharmaceuticals and Zosano Pharma’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vertex Pharmaceuticals 8.53% 9.23% 5.01%
Zosano Pharma N/A -169.79% -94.28%

Earnings and Valuation

This table compares Vertex Pharmaceuticals and Zosano Pharma’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Vertex Pharmaceuticals $1.70 billion 23.53 -$112.05 million $0.78 203.08
Zosano Pharma $310,000.00 71.96 -$29.83 million ($1.18) -0.48

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

Summary

Vertex Pharmaceuticals beats Zosano Pharma on 8 of the 13 factors compared between the two stocks.

About Vertex Pharmaceuticals

Vertex Pharmaceuticals Incorporated is engaged in discovering, developing, manufacturing and commercializing medicines for serious diseases. The Company is focused on developing and commercializing therapies for the treatment of cystic fibrosis (CF) and advancing its research and development programs in other indications. The Company’s marketed medicines are ORKAMBI and KALYDECO. ORKAMBI (lumacaftor in combination with ivacaftor) is approved as a treatment for patients having two copies (homozygous) of the Delta-F508 (F508del) mutation in their cystic fibrosis transmembrane conductance regulator (CFTR) gene. KALYDECO (ivacaftor) is approved for the treatment of CF patients having the G551D mutation or other specified mutations in their CFTR gene. The Company’s development programs in the field of CF include Tezacaftor (VX-661), VX-152, VX-440, VX-659, VX-445 and VX-371. VX-152, VX-440, VX-659 and VX-445 are CFTR corrector compounds.

About Zosano Pharma

Zosano Pharma Corporation is a clinical-stage specialty pharmaceutical company. The Company has developed a transdermal microneedle patch system to deliver its formulations of existing drugs through the skin for the treatment of a range of indications. Its microneedle patch system offers consistent drug delivery and improved ease of use and room-temperature stability. The Company’s short-wear-time transdermal patch consists of an array of titanium microneedles that is coated with its formulation of an approved drug and attached to an adhesive patch. When the patch is applied with its hand-held applicator, the microneedles painlessly penetrate the skin, resulting in rapid dissolution and absorption of the drug coating through the capillary bed. Its product candidates include ZP-Triptan, ZP-Glucagon and ZP-PTH. ZP-PTH is a formulation of teriparatide, a synthetic form of parathyroid hormone. ZP-Glucagon is a formulation of glucagon.

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