Contrasting Orexigen Therapeutics (OREX) & Five Prime Therapeutics (FPRX)

Orexigen Therapeutics (NASDAQ: OREX) and Five Prime Therapeutics (NASDAQ:FPRX) are both small-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, institutional ownership, profitability, valuation, analyst recommendations, risk and earnings.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Orexigen Therapeutics and Five Prime Therapeutics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orexigen Therapeutics 0 0 0 0 N/A
Five Prime Therapeutics 0 0 8 0 3.00

Five Prime Therapeutics has a consensus price target of $57.50, indicating a potential upside of 23.31%. Given Five Prime Therapeutics’ higher probable upside, analysts plainly believe Five Prime Therapeutics is more favorable than Orexigen Therapeutics.

Profitability

This table compares Orexigen Therapeutics and Five Prime Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orexigen Therapeutics -120.77% -824.15% -61.12%
Five Prime Therapeutics -356.39% -31.78% -27.55%

Volatility and Risk

Orexigen Therapeutics has a beta of 2.35, meaning that its stock price is 135% more volatile than the S&P 500. Comparatively, Five Prime Therapeutics has a beta of 4.19, meaning that its stock price is 319% more volatile than the S&P 500.

Institutional and Insider Ownership

39.7% of Orexigen Therapeutics shares are owned by institutional investors. Comparatively, 84.1% of Five Prime Therapeutics shares are owned by institutional investors. 13.3% of Orexigen Therapeutics shares are owned by insiders. Comparatively, 6.5% of Five Prime Therapeutics shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Orexigen Therapeutics and Five Prime Therapeutics’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Orexigen Therapeutics $63.39 million 0.46 -$163.64 million ($7.24) -0.26
Five Prime Therapeutics $32.90 million 39.66 -$133.09 million ($4.24) -11.00

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

Summary

Five Prime Therapeutics beats Orexigen Therapeutics on 9 of the 12 factors compared between the two stocks.

About Orexigen Therapeutics

Orexigen Therapeutics, Inc. is a biopharmaceutical company. The Company is focused on the treatment of obesity. The Company’s product, Contrave, is approved in the United States by the United States Food and Drug Administration as an adjunct to a reduced-calorie diet and increased physical activity for chronic weight management in adults with an initial body mass index (BMI) of 30 kilograms per square meter or greater (obese) or 27 kilograms per square meter or greater (overweight) in the presence of a weight-related comorbid condition. Contrave is a combination of generic drug components, each of which has received regulatory approval for other indications and has been commercialized in the United States and in a range of member countries of the European Union. Contrave regulates appetite and energy expenditure through central nervous system (CNS) activity. Contrave is a fixed dose combination of bupropion hydrochloride (HCl) extended release (ER) and naltrexone HCl ER.

About Five Prime Therapeutics

Five Prime Therapeutics, Inc. is a clinical-stage biotechnology company focused on discovering and developing protein therapeutics. The Company’s product candidates include Cabiralizumab (FPA008), which is an antibody that inhibits colony stimulating factor-1 receptor, that it is studying in clinical trials as a monotherapy in pigmented villonodular synovitis, and in multiple cancers in combination with programmed-death 1 immune checkpoint inhibitor, Opdivo; FPA144, which is an antibody that inhibits fibroblast growth factor receptor 2b, that it is initially developing to treat patients with gastric (stomach) cancer and is in a Phase I clinical trial, and FP-1039, which is a fusion protein that traps and neutralizes cancer-promoting fibroblast growth factors, involved in cancer cell proliferation and new blood vessel formation and is in Phase Ib clinical development to treat patients with malignant pleural mesothelioma. Its preclinical programs include FPA150, FPA154 and FPT155.

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