Analyzing Cardiome Pharma (CRME) and Peregrine Pharmaceuticals (NASDAQ:CDMO)

Peregrine Pharmaceuticals (NASDAQ: CDMO) and Cardiome Pharma (NASDAQ:CRME) are both small-cap medical companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitability, dividends, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and price targets for Peregrine Pharmaceuticals and Cardiome Pharma, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Peregrine Pharmaceuticals 0 0 1 0 3.00
Cardiome Pharma 0 0 3 0 3.00

Peregrine Pharmaceuticals currently has a consensus target price of $10.00, suggesting a potential upside of 212.50%. Cardiome Pharma has a consensus target price of $7.25, suggesting a potential upside of 425.36%. Given Cardiome Pharma’s higher probable upside, analysts plainly believe Cardiome Pharma is more favorable than Peregrine Pharmaceuticals.

Institutional and Insider Ownership

18.4% of Peregrine Pharmaceuticals shares are owned by institutional investors. Comparatively, 52.4% of Cardiome Pharma shares are owned by institutional investors. 2.5% of Peregrine Pharmaceuticals shares are owned 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.

Valuation & Earnings

This table compares Peregrine Pharmaceuticals and Cardiome Pharma’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Peregrine Pharmaceuticals $57.63 million 2.51 -$28.15 million ($0.81) -3.95
Cardiome Pharma $25.26 million 1.89 -$19.61 million ($0.83) -1.66

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

Profitability

This table compares Peregrine Pharmaceuticals and Cardiome Pharma’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Peregrine Pharmaceuticals -39.23% -52.55% -24.77%
Cardiome Pharma -112.91% -94.68% -40.25%

Risk and Volatility

Peregrine Pharmaceuticals has a beta of 2.23, suggesting that its share price is 123% more volatile than the S&P 500. Comparatively, Cardiome Pharma has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500.

Summary

Peregrine Pharmaceuticals beats Cardiome Pharma on 8 of the 13 factors compared between the two stocks.

Peregrine Pharmaceuticals Company Profile

Avid Bioservices, Inc., formerly Peregrine Pharmaceuticals, Inc., incorporated on September 25, 1996, is a biopharmaceutical company. The Company is engaged in providing contract manufacturing services for third party customers on a fee-for-service basis while also supporting its internal drug development efforts. The Company delivers pharmaceutical products through its contract manufacturing business and through licensing its development-stage immunotherapy products. The company provides a comprehensive range of process development, high quality cGMP clinical and commercial manufacturing services for the biotechnology and biopharmaceutical industries. Its services include cGMP clinical and commercial product manufacturing, purification, bulk packaging, stability testing and regulatory strategy, submission and support. The Company also provides a variety of process development activities, including cell line development and optimization.

Cardiome Pharma Company Profile

Cardiome Pharma Corp. (Cardiome) is a specialty pharmaceutical company. The Company is engaged in the development and commercialization of cardiovascular therapies for heart disease. The Company’s segments are Europe and Rest of World. Cardiome has two marketed, in-hospital, cardiology products, which include BRINAVESS (vernakalant IV), approved in Europe and other territories for the conversion of onset atrial fibrillation (AF) to sinus rhythm in adults, and AGGRASTAT (tirofiban hydrochloride (HCl)), indicated for use in patients with acute coronary syndrome. Cardiome also commercializes ESMOCARD and ESMOCARD LYO (esmolol hydrochloride), a short-acting beta-blocker used to control heart rate in various cardiovascular indications, in select European markets. Cardiome has also licensed TREVYENT, a development-stage drug device combination product that is under development for pulmonary arterial hypertension, in certain regions outside the United States.

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