Spark Therapeutics (ONCE) versus Zafgen (ZFGN) Critical Comparison

Spark Therapeutics (NASDAQ: ONCE) and Zafgen (NASDAQ:ZFGN) are both medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.

Risk & Volatility

Spark Therapeutics has a beta of 3.38, suggesting that its share price is 238% more volatile than the S&P 500. Comparatively, Zafgen has a beta of -1.36, suggesting that its share price is 236% less volatile than the S&P 500.

Profitability

This table compares Spark Therapeutics and Zafgen’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Spark Therapeutics -962.72% -59.74% -52.08%
Zafgen N/A -44.54% -40.97%

Valuation & Earnings

This table compares Spark Therapeutics and Zafgen’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Spark Therapeutics $20.36 million 150.08 -$165.64 million ($6.39) -13.08
Zafgen N/A N/A -$50.51 million ($1.89) -1.85

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

Analyst Recommendations

This is a breakdown of recent ratings for Spark Therapeutics and Zafgen, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Spark Therapeutics 1 1 15 0 2.82
Zafgen 0 1 1 0 2.50

Spark Therapeutics currently has a consensus target price of $91.63, indicating a potential upside of 9.59%. Zafgen has a consensus target price of $9.00, indicating a potential upside of 157.88%. Given Zafgen’s higher probable upside, analysts plainly believe Zafgen is more favorable than Spark Therapeutics.

Institutional and Insider Ownership

77.3% of Spark Therapeutics shares are owned by institutional investors. Comparatively, 48.5% of Zafgen shares are owned by institutional investors. 7.3% of Spark Therapeutics shares are owned by insiders. Comparatively, 21.2% of Zafgen shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Zafgen beats Spark Therapeutics on 7 of the 12 factors compared between the two stocks.

Spark Therapeutics Company Profile

Spark Therapeutics, Inc. is a gene therapy company. The Company focuses on treating orphan diseases. It has a pipeline of product candidates targeting multiple rare blinding conditions, hematologic disorders and neurodegenerative diseases. Its pipeline includes a product candidate targeting choroideremia (CHM), which is in a Phase I/II clinical trial and a product candidate for hemophilia A, which is in a Phase I/II clinical trial. Its product investigational candidate, voretigene neparvovec, is intended to treat a genetic blinding condition or inherited retinal disease (IRD). The programs targeting hematologic disorders include SPK-FIX, for which the lead product candidate, SPK-9001, is in a Phase I/II clinical trial for the treatment of hemophilia B, as well as SPK-FVIII for the treatment of hemophilia A. In its SPK-FVIII program for the treatment of hemophilia A, the Company has initiated a dose-escalating Phase I/II clinical trial for its lead product candidate, SPK-8011.

Zafgen Company Profile

Zafgen, Inc. is a biopharmaceutical company. The Company is focused on improving the health and well-being of patients affected by obesity and complex metabolic disorders. The Company’s lead product candidate, Beloranib, is a twice-weekly subcutaneous injection being developed for the treatment of multiple indications, including severe obesity in rare diseases, such as Prader-Willi syndrome (PWS) and hypothalamic injury-associated obesity (HIAO), including craniopharyngioma-associated obesity. Beloranib is in Phase III stage of development for PWS. It is also developing ZGN-839, a liver-targeted methionine aminopeptidase 2 (MetAP2) inhibitor, for the treatment of nonalcoholic steatohepatitis (NASH) and abdominal obesity, as well as other second-generation MetAP2 inhibitors for the treatment of severe obesity. It is also evaluating additional MetAP2 inhibitors beyond Beloranib as a development candidate for the treatment of severe obesity in the general population.

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