Financial Survey: Durect (DRRX) and Oramed Pharmaceuticals (ORMP)

Durect (NASDAQ: DRRX) and Oramed Pharmaceuticals (NASDAQ:ORMP) are both small-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, valuation, profitability and analyst recommendations.

Insider and Institutional Ownership

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42.9% of Durect shares are held by institutional investors. Comparatively, 2.6% of Oramed Pharmaceuticals shares are held by institutional investors. 10.3% of Durect shares are held by company insiders. Comparatively, 27.5% of Oramed Pharmaceuticals shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations for Durect and Oramed Pharmaceuticals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Durect 0 1 2 0 2.67
Oramed Pharmaceuticals 0 0 2 0 3.00

Durect currently has a consensus target price of $2.83, suggesting a potential upside of 20.06%. Oramed Pharmaceuticals has a consensus target price of $22.50, suggesting a potential upside of 219.15%. Given Oramed Pharmaceuticals’ stronger consensus rating and higher possible upside, analysts plainly believe Oramed Pharmaceuticals is more favorable than Durect.

Profitability

This table compares Durect and Oramed Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Durect -7.51% -44.90% -7.62%
Oramed Pharmaceuticals -169.17% -49.94% -25.64%

Earnings & Valuation

This table compares Durect and Oramed Pharmaceuticals’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Durect $49.17 million 7.36 -$3.69 million ($0.03) -78.67
Oramed Pharmaceuticals $2.46 million 41.18 -$10.48 million ($0.79) -8.92

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

Risk & Volatility

Durect has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500. Comparatively, Oramed Pharmaceuticals has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500.

Summary

Durect beats Oramed Pharmaceuticals on 8 of the 13 factors compared between the two stocks.

About Durect

Durect Corporation is a biopharmaceutical company with research and development programs. The Company’s products candidates include DUR-928, oral for metabolic/lipid disorders, and DUR-928, injectable for acute organ injuries. Its other product candidates include POSIMIR (controlled release injection of bupivacaine), REMOXY (oral controlled release oxycodone), ORADUR-ADHD, ELADUR (controlled release injection of bupivicane), Relday (risperidone), ORADUR-based opioid (hydromorphone) and SABER-based ophthalmic. The Company’s ALZET product line consists of miniature, implantable osmotic pumps and accessories used for experimental research in mice, rats and other laboratory animals. The Company also manufactures and sells osmotic pumps used in laboratory research and design; and develops and manufactures a range of standard and custom biodegradable polymers and excipients for pharmaceutical and medical device clients for use as raw materials in their products.

About Oramed Pharmaceuticals

Oramed Pharmaceuticals Inc. (Oramed) is engaged in the field of oral delivery solutions for drugs and vaccines presently delivered via injection. Oramed’s flagship product, an orally ingestible insulin capsule in phase II clinical trials, is focused on the treatment of diabetes. The Company is developing orally ingestible protein oral delivery (POD) technology for the delivery of drugs presently administered by way of injection. Oramed’s delivery platform protects protein sand enhances their absorption, allowing them to reach the blood stream through the portal vein. The Company’s products include ORMD-0801, Oral insulin capsule; ORMD 0901, Oral Exenatide capsule; and combination therapy of ORMD 0801 + ORMD 0901. ORMD-0801 is under phase II A clinical trials. ORMD-0901 is under preclinical/Investigational New Drug (IND) stage under phase I B.

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