Catabasis Pharmaceuticals (CATB) and Aduro BioTech (NASDAQ:ADRO) Critical Analysis

Catabasis Pharmaceuticals (NASDAQ: CATB) and Aduro BioTech (NASDAQ:ADRO) are both small-cap healthcare companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.

Earnings and Valuation

This table compares Catabasis Pharmaceuticals and Aduro BioTech’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Catabasis Pharmaceuticals N/A N/A -$36.06 million ($1.51) -1.02
Aduro BioTech $50.68 million 10.83 -$91.14 million ($1.36) -5.22

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

Insider & Institutional Ownership

32.3% of Catabasis Pharmaceuticals shares are owned by institutional investors. Comparatively, 45.2% of Aduro BioTech shares are owned by institutional investors. 40.7% of Catabasis Pharmaceuticals shares are owned by company insiders. Comparatively, 6.6% of Aduro BioTech shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Catabasis Pharmaceuticals and Aduro BioTech’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Catabasis Pharmaceuticals N/A -135.85% -95.96%
Aduro BioTech -548.92% -39.28% -21.15%

Analyst Recommendations

This is a breakdown of recent ratings for Catabasis Pharmaceuticals and Aduro BioTech, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Catabasis Pharmaceuticals 0 1 5 0 2.83
Aduro BioTech 0 0 8 0 3.00

Catabasis Pharmaceuticals presently has a consensus target price of $5.33, indicating a potential upside of 246.32%. Aduro BioTech has a consensus target price of $18.50, indicating a potential upside of 160.56%. Given Catabasis Pharmaceuticals’ higher possible upside, analysts clearly believe Catabasis Pharmaceuticals is more favorable than Aduro BioTech.

Summary

Aduro BioTech beats Catabasis Pharmaceuticals on 7 of the 12 factors compared between the two stocks.

About Catabasis Pharmaceuticals

Catabasis Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company. The Company is focused on the discovery, development and commercialization of therapeutics based on its Safely Metabolized And Rationally Targeted (SMART), a linker drug discovery platform. The SMART linker drug discovery platform enables to engineer product candidates that can modulate multiple targets in a disease. The Company’s primary focus is on treatments for rare diseases. The Company is also developing other product candidates for the treatment of lipid disorders. The Company’s CAT-1004 is a SMART linker conjugate of salicylate, a non-steroidal anti-inflammatory drug, and the omega-3 fatty acid docosahexaenoic acid (DHA), a naturally occurring unsaturated fatty acid with anti-inflammatory properties. Its CAT-2000 series product candidates inhibit the Sterol Regulatory Element Binding Protein (SREBP) pathway. The Company’s CAT-4001 is a SMART linker conjugate of monomethyl fumarate and DHA.

About Aduro BioTech

Aduro Biotech, Inc. is an immunotherapy company, which focuses on the discovery, development and commercialization of therapies that manage the treatment of various diseases, including cancer. The Company’s product candidates from its Live, Attenuated, Double-Deleted (LADD) Listeria monocytogenes, Stimulator of Interferon Genes Pathway Activator, and B-select monoclonal antibody platforms are designed to stimulate and/or regulate innate and adaptive immune responses, either as single agents or in combination with conventional therapies, as well as other immunotherapies. Its LADD technology platform is being developed as a treatment for multiple indications, including mesothelioma, ovarian, gastric, lung and prostate cancers. Its LADD product candidate is CRS-207, which is being developed as a treatment for multiple indications, including mesothelioma, ovarian and gastric cancers. ADU-214 and ADU-741 are product candidates in development for lung and prostate cancers, respectively.

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