Comparing Vanda Pharmaceuticals (NASDAQ:VNDA) and Achaogen (AKAO)

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

Earnings and Valuation

This table compares Achaogen and Vanda Pharmaceuticals’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Achaogen $41.77 million 12.12 -$71.22 million ($3.36) -3.55
Vanda Pharmaceuticals $146.02 million 4.46 -$18.01 million ($0.31) -46.77

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Achaogen and Vanda Pharmaceuticals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Achaogen 0 1 9 0 2.90
Vanda Pharmaceuticals 0 0 5 0 3.00

Achaogen presently has a consensus target price of $25.44, suggesting a potential upside of 113.10%. Vanda Pharmaceuticals has a consensus target price of $22.20, suggesting a potential upside of 53.10%. Given Achaogen’s higher probable upside, research analysts plainly believe Achaogen is more favorable than Vanda Pharmaceuticals.

Profitability

This table compares Achaogen and Vanda Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Achaogen -593.61% -80.44% -51.17%
Vanda Pharmaceuticals -9.01% -10.99% -6.89%

Institutional and Insider Ownership

85.7% of Achaogen shares are held by institutional investors. Comparatively, 88.4% of Vanda Pharmaceuticals shares are held by institutional investors. 8.4% of Achaogen shares are held by insiders. Comparatively, 7.6% of Vanda Pharmaceuticals shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

Achaogen has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500. Comparatively, Vanda Pharmaceuticals has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500.

Summary

Vanda Pharmaceuticals beats Achaogen on 8 of the 14 factors compared between the two stocks.

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.

About Vanda Pharmaceuticals

Vanda Pharmaceuticals Inc. is a biopharmaceutical company. The Company is focused on the development and commercialization of therapies to address unmet medical needs. Its product portfolio includes HETLIOZ (tasimelteon), Fanapt (iloperidone), Tradipitant (VLY-686), Trichostatin A and AQW051. It offers HETLIOZ for the treatment of Non-24-Hour Sleep-Wake Disorder (Non-24). HETLIOZ is in clinical development for the treatment of Pediatric Non-24, Jet Lag Disorder and Smith-Magenis Syndrome. It offers Fanapt for the treatment of schizophrenia. Fanapt has potential utility in various other disorders. Tradipitant is a small molecule neurokinin-1 receptor (NK-1R) antagonist, which is in clinical development for the treatment of chronic pruritus in atopic dermatitis. Trichostatin A is a small molecule histone deacetylase (HDAC) inhibitor. AQW051 is a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist. AQW051 is indicated for the treatment of central nervous system disorders.

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