Conatus Pharmaceuticals (CNAT) and Trevena (TRVN) Critical Review

Conatus Pharmaceuticals (NASDAQ: CNAT) and Trevena (NASDAQ:TRVN) are both small-cap healthcare companies, but which is the better business? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, valuation, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings for Conatus Pharmaceuticals and Trevena, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Conatus Pharmaceuticals 0 0 5 0 3.00
Trevena 0 1 9 0 2.90

Conatus Pharmaceuticals currently has a consensus target price of $12.62, indicating a potential upside of 138.02%. Trevena has a consensus target price of $8.65, indicating a potential upside of 438.94%. Given Trevena’s higher probable upside, analysts clearly believe Trevena is more favorable than Conatus Pharmaceuticals.

Profitability

This table compares Conatus Pharmaceuticals and Trevena’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Conatus Pharmaceuticals -80.98% -83.02% -25.04%
Trevena N/A -150.22% -94.66%

Insider and Institutional Ownership

35.8% of Conatus Pharmaceuticals shares are owned by institutional investors. Comparatively, 56.8% of Trevena shares are owned by institutional investors. 13.9% of Conatus Pharmaceuticals shares are owned by company insiders. Comparatively, 4.6% of Trevena 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.

Valuation and Earnings

This table compares Conatus Pharmaceuticals and Trevena’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Conatus Pharmaceuticals $800,000.00 198.75 -$29.73 million ($0.81) -6.54
Trevena $3.75 million 26.66 -$102.99 million ($1.65) -0.97

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

Volatility & Risk

Conatus Pharmaceuticals has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500. Comparatively, Trevena has a beta of -0.58, indicating that its share price is 158% less volatile than the S&P 500.

Summary

Conatus Pharmaceuticals beats Trevena on 8 of the 14 factors compared between the two stocks.

Conatus Pharmaceuticals Company Profile

Conatus Pharmaceuticals Inc. is a biotechnology company. The Company focuses on the development and commercialization of medicines to treat liver disease. The Company operates through commercialization and development of pharmaceutical products segment. The Company is engaged in developing emricasan, which is an orally active pan-caspase protease inhibitor for the treatment of patients with chronic liver disease. Emricasan has the potential to interrupt the progression of liver disease and provide treatment options in multiple areas of liver disease. Emricasan is designed to slow or halt the progression of chronic liver disease caused by fibrosis and cirrhosis. Emricasan works by inhibiting caspases, which are a family of related enzymes that plays as modulators of critical cellular functions, including functions that result in apoptosis and inflammation.

Trevena Company Profile

Trevena Inc. is a biopharmaceutical company, which is engaged in developing various therapies. The Company is developing OLINVO, a u-receptor G protein pathway selective modulator (u-GPS) for the management of moderate-to-severe acute pain where intravenous (IV) administration is preferred. It is focused on commercializing it in the United States for use in acute care settings, such as hospitals and ambulatory surgery centers. It is also developing TRV250, a G protein biased ligand targeting the o-receptor, as a compound with a non-narcotic mechanism for the treatment of migraine. TRV250 also may have utility in a range of other central nervous system (CNS) indications. It is focused on commencing a Phase I study of TRV250 in the United Kingdom. Its ABLE product platform is a collection of biological information, in vitro assays, know-how and expertise that it uses to identify unique G protein coupled receptors (GPCR)-targeted biased ligands with various pharmaceutical properties.

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