Analyzing Mirati Therapeutics (MRTX) and Jazz Pharmaceuticals (JAZZ)

Jazz Pharmaceuticals (NASDAQ: JAZZ) and Mirati Therapeutics (NASDAQ:MRTX) are both medical companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, risk and profitability.

Insider and Institutional Ownership

93.1% of Jazz Pharmaceuticals shares are owned by institutional investors. Comparatively, 66.3% of Mirati Therapeutics shares are owned by institutional investors. 4.3% of Jazz Pharmaceuticals shares are owned by insiders. Comparatively, 5.1% of Mirati Therapeutics shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Jazz Pharmaceuticals has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, Mirati Therapeutics has a beta of 2.1, suggesting that its stock price is 110% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Jazz Pharmaceuticals and Mirati Therapeutics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Jazz Pharmaceuticals 0 5 15 0 2.75
Mirati Therapeutics 0 1 8 0 2.89

Jazz Pharmaceuticals presently has a consensus price target of $180.00, suggesting a potential upside of 28.64%. Mirati Therapeutics has a consensus price target of $14.75, suggesting a potential downside of 47.23%. Given Jazz Pharmaceuticals’ higher probable upside, equities research analysts plainly believe Jazz Pharmaceuticals is more favorable than Mirati Therapeutics.

Earnings & Valuation

This table compares Jazz Pharmaceuticals and Mirati Therapeutics’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Jazz Pharmaceuticals $1.49 billion 5.64 $396.83 million $6.07 23.05
Mirati Therapeutics N/A N/A -$83.11 million ($3.11) -8.99

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

Profitability

This table compares Jazz Pharmaceuticals and Mirati Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Jazz Pharmaceuticals 23.58% 22.92% 10.07%
Mirati Therapeutics N/A -96.82% -82.29%

Summary

Jazz Pharmaceuticals beats Mirati Therapeutics on 10 of the 13 factors compared between the two stocks.

About Jazz Pharmaceuticals

Jazz Pharmaceuticals, Inc. is a specialty pharmaceutical company focusing on the development and commercialization of pharmaceutical products to meet unmet medical needs in neurology and psychiatry. As of December 31, 2009, the Company markets two products: Xyrem (sodium oxybate) for the treatment of both cataplexy and excessive daytime sleepiness in patients with narcolepsy; and Luvox CR (fluvoxamine maleate) for the treatment of both obsessive compulsive disorder and social anxiety disorder. Its marketed products and late-stage product candidate are Xyrem (sodium oxybate) oral solution, Luvox CR (fluvoxamine maleate) Extended-Release Capsules and JZP-6 (sodium oxybate). Its other product candidates in clinical development are oral tablet forms of sodium oxybate; JZP-8 (intranasal clonazepam); JZP-4 (elpetrigine), and JZP-7 (ropinirole gel).

About Mirati Therapeutics

Mirati Therapeutics, Inc., a clinical-stage biopharmaceutical company, develops a pipeline of oncology products. The company’s clinical stage product candidates include glesatinib, an orally-bioavailable, potent, small molecule kinase inhibitor that is in Phase II clinical trials for the treatment of non-small cell lung cancer (NSCLC) patients with genetic alterations of MET; and in Phase Ib clinical trials in patients with genetic alterations of MET and Axl in NSCLC and other solid tumors. Its clinical stage product candidates also comprise sitravatinib, an orally-bioavailable, potent, small molecule spectrum-selective kinase inhibitor, which is in Phase II clinical trials for the treatment of solid tumors, such as NSCLC and metastatic Renal Cell Carcinoma, as well as in Phase Ib clinical trials to treat NSCLC patients with RET, CHR4q12, CBL, and AXL genetic alterations; and mocetinostat, an orally administered spectrum-selective Class 1 histone deacetylase inhibitor, which is in Phase Ib/II clinical trials in combination with durvalumab for the treatment of patients with NSCLC. The company has a collaboration agreement with Foundation Medicine, Inc. and Guardant Health, Inc. to explore development of their platforms as companion diagnostics for glesatinib. Mirati Therapeutics, Inc. is headquartered in San Diego, California.

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