GW Pharmaceuticals PLC (GWPH) and Insys Therapeutics (NASDAQ:INSY) Critical Review

GW Pharmaceuticals PLC (NASDAQ: GWPH) and Insys Therapeutics (NASDAQ:INSY) are both medical companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, risk, analyst recommendations, dividends, institutional ownership and profitability.

Earnings and Valuation

This table compares GW Pharmaceuticals PLC and Insys Therapeutics’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
GW Pharmaceuticals PLC $10.25 million 251.23 -$171.76 million ($5.43) -18.74
Insys Therapeutics $191.17 million 3.36 -$8.73 million ($0.25) -35.64

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

Insider and Institutional Ownership

75.8% of GW Pharmaceuticals PLC shares are held by institutional investors. Comparatively, 28.2% of Insys Therapeutics shares are held by institutional investors. 5.5% of GW Pharmaceuticals PLC shares are held by insiders. Comparatively, 67.9% of Insys Therapeutics shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings for GW Pharmaceuticals PLC and Insys Therapeutics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GW Pharmaceuticals PLC 0 2 6 0 2.75
Insys Therapeutics 0 2 2 0 2.50

GW Pharmaceuticals PLC currently has a consensus target price of $150.86, indicating a potential upside of 48.26%. Insys Therapeutics has a consensus target price of $12.67, indicating a potential upside of 42.16%. Given GW Pharmaceuticals PLC’s stronger consensus rating and higher probable upside, analysts plainly believe GW Pharmaceuticals PLC is more favorable than Insys Therapeutics.

Profitability

This table compares GW Pharmaceuticals PLC and Insys Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GW Pharmaceuticals PLC -1,384.41% -28.80% -25.20%
Insys Therapeutics -9.63% -3.02% -2.34%

Risk and Volatility

GW Pharmaceuticals PLC has a beta of 2.67, meaning that its stock price is 167% more volatile than the S&P 500. Comparatively, Insys Therapeutics has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500.

Summary

Insys Therapeutics beats GW Pharmaceuticals PLC on 7 of the 13 factors compared between the two stocks.

About GW Pharmaceuticals PLC

GW Pharmaceuticals plc is a biopharmaceutical company focused on developing and commercializing therapeutics from its cannabinoid product platform in a range of disease areas. The Company’s lead cannabinoid product candidate is Epidiolex, which is a liquid formulation of pure plant-derived cannabidiol (CBD). The Company offers Sativex (nabiximols), which is indicated for the treatment of spasticity due to multiple sclerosis (MS). The Company operates through three segments: Commercial, Sativex Research and Development, and Pipeline Research and Development. The Commercial segment distributes and sells the Company’s commercial products. The Sativex Research and Development segment seeks to maximize the potential of Sativex through the development of new indications. The Pipeline Research and Development segment seeks to develop cannabinoid medications other than Sativex across a range of therapeutic areas using its cannabinoid technology platform.

About Insys Therapeutics

Insys Therapeutics, Inc. is a commercial-stage specialty pharmaceutical company. The Company develops and commercializes supportive care products. The Company’s product Subsys, is a sublingual fentanyl spray for breakthrough cancer pain (BTCP) in opioid-tolerant patients and a single-use product that delivers fentanyl, an opioid analgesic, for transmucosal absorption underneath the tongue. The Company markets Subsys through its field sales force focused on supportive care physicians in the United States. Subsys delivers a liquid fentanyl formulation in approximately 100, 200, 400, 600, 800, 1,200 and 1,600 micrograms (mcg) dosages. The Company’s lead dronabinol product candidate is Syndros, which is under review for approval at the Food and Drug Administration. In addition, the Company is evaluating sublingual spray, inhaled and intravenous formulations of dronabinol in preclinical studies.

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