Comparing Arena Pharmaceuticals (ARNA) and Aptose Biosciences (APTO)

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Arena Pharmaceuticals and Aptose Biosciences, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arena Pharmaceuticals 0 1 7 0 2.88
Aptose Biosciences 0 1 3 0 2.75

Arena Pharmaceuticals presently has a consensus price target of $41.14, suggesting a potential upside of 0.84%. Aptose Biosciences has a consensus price target of $6.00, suggesting a potential upside of 123.88%. Given Aptose Biosciences’ higher probable upside, analysts clearly believe Aptose Biosciences is more favorable than Arena Pharmaceuticals.

Institutional and Insider Ownership

72.5% of Arena Pharmaceuticals shares are held by institutional investors. Comparatively, 0.9% of Aptose Biosciences shares are held by institutional investors. 1.9% of Arena Pharmaceuticals shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Arena Pharmaceuticals has a beta of 1.64, suggesting that its share price is 64% more volatile than the S&P 500. Comparatively, Aptose Biosciences has a beta of 2.84, suggesting that its share price is 184% more volatile than the S&P 500.

Profitability

This table compares Arena Pharmaceuticals and Aptose Biosciences’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arena Pharmaceuticals -36.78% -34.12% -14.83%
Aptose Biosciences N/A -129.12% -111.84%

Earnings & Valuation

This table compares Arena Pharmaceuticals and Aptose Biosciences’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Arena Pharmaceuticals $123.97 million 12.92 -$22.51 million ($0.94) -43.40
Aptose Biosciences N/A N/A -$14.06 million ($0.66) -4.06

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

Summary

Arena Pharmaceuticals beats Aptose Biosciences on 7 of the 13 factors compared between the two stocks.

About Arena Pharmaceuticals

Arena Pharmaceuticals, Inc. is a biopharmaceutical company. The Company is focused on developing small molecule drugs across a range of therapeutic areas. The Company has three primary investigational clinical programs: etrasimod (APD334) in Phase II evaluation for ulcerative colitis, APD371 entering Phase II evaluation for the treatment of pain associated with Crohn’s disease, and ralinepag (APD811) in Phase II evaluation for pulmonary arterial hypertension (PAH). The Company’s drug, Lorcaserin, is approved for marketing in the United States and South Korea for the indication of weight management. The Company’s drug candidates in clinical development include APD334 for autoimmune diseases, ralinepag for vascular diseases and APD371 for pain. The Company’s programs under collaboration include nelotanserin for dementia-associated psychosis, temanogrel for thrombotic diseases, and an undisclosed orphan GPCR for central nervous system (CNS) indication(s).

About Aptose Biosciences

Aptose Biosciences Inc. (Aptose) is a clinical-stage biotechnology company. The Company is engaged in the development of anticancer drugs that target specific epigenetic processes and signal transduction abnormalities that underlie a particular life-threatening malignancy. Its product pipeline includes cancer drug candidates that exert activity as stand-alone agents and that enhance the activities of other anticancer agents without causing overlapping toxicities. The Company develops therapeutics focused on epigenetic processes and signal transduction abnormalities at the edge of cancer research, coupled with companion diagnostics to identify the optimal patient population for its products. The Company’s APTO-253 is a small molecule that can induce expression of the genes that codes for the Kruppel-like factor 4 (KLF4) master transcription factor and the p21 cell cycle inhibitor protein.

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