Head-To-Head Comparison: Sorrento Therapeutics (NASDAQ:SRNE) & Achaogen (AKAO)

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

Insider & Institutional Ownership

86.6% of Achaogen shares are held by institutional investors. Comparatively, 12.0% of Sorrento Therapeutics shares are held by institutional investors. 8.4% of Achaogen shares are held by insiders. Comparatively, 5.0% of Sorrento Therapeutics shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Achaogen and Sorrento Therapeutics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Achaogen 0 1 9 0 2.90
Sorrento Therapeutics 0 0 5 0 3.00

Achaogen currently has a consensus price target of $26.11, suggesting a potential upside of 140.66%. Sorrento Therapeutics has a consensus price target of $15.00, suggesting a potential upside of 111.27%. Given Achaogen’s higher probable upside, equities analysts clearly believe Achaogen is more favorable than Sorrento Therapeutics.

Earnings and Valuation

This table compares Achaogen and Sorrento Therapeutics’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Achaogen $41.77 million 11.01 -$71.22 million ($3.36) -3.23
Sorrento Therapeutics $8.15 million 72.04 -$60.92 million ($0.42) -16.90

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

Risk & Volatility

Achaogen has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500. Comparatively, Sorrento Therapeutics has a beta of 1.94, suggesting that its share price is 94% more volatile than the S&P 500.

Profitability

This table compares Achaogen and Sorrento Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Achaogen -593.61% -80.44% -51.17%
Sorrento Therapeutics -15.62% -26.98% -6.39%

Summary

Sorrento Therapeutics 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 Sorrento Therapeutics

Sorrento Therapeutics, Inc. is a biopharmaceutical company. The Company is engaged in the discovery, acquisition, development and commercialization of drug therapeutics. Its primary therapeutic focus is oncology, including the treatment of chronic cancer pain. It is also developing therapeutic products for other indications, including immunology and infectious diseases. Its products in the pipeline include Chimeric Antigen Receptor-T Cell (CAR-T) programs, resiniferatoxin (RTX), and biosimilar/biobetter antibodies clinical development programs. Its pipeline also includes preclinical fully human therapeutic monoclonal antibodies (mAbs), including biosimilars/biobetters, fully human anti-PD-L1 and anti-PD-1 checkpoint inhibitors derived from its G-MAB library platform, antibody drug conjugates (ADCs), bispecific antibodies (BsAbs), as well as CAR-T and Chimeric Antigen Receptor Natural Killer (NK) cells (CAR. NK) for adoptive cellular immunotherapy.

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