Critical Review: Chiasma (CHMA) and Catalyst Biosciences (CBIO)

Chiasma (NASDAQ: CHMA) and Catalyst Biosciences (NASDAQ:CBIO) are both small-cap medical companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, profitability and risk.

Volatility & Risk

Chiasma has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500. Comparatively, Catalyst Biosciences has a beta of 1.94, indicating that its share price is 94% more volatile than the S&P 500.

Earnings and Valuation

This table compares Chiasma and Catalyst Biosciences’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Chiasma $10,000.00 4,510.30 -$61.11 million ($1.17) -1.58
Catalyst Biosciences $400,000.00 75.96 -$16.94 million ($13.12) -0.54

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Chiasma and Catalyst Biosciences, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chiasma 1 0 0 0 1.00
Catalyst Biosciences 0 0 2 0 3.00

Catalyst Biosciences has a consensus price target of $10.50, indicating a potential upside of 48.94%. Given Catalyst Biosciences’ stronger consensus rating and higher possible upside, analysts plainly believe Catalyst Biosciences is more favorable than Chiasma.

Profitability

This table compares Chiasma and Catalyst Biosciences’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chiasma N/A -36.49% -32.48%
Catalyst Biosciences -2,438.50% -91.67% -55.28%

Institutional & Insider Ownership

54.6% of Chiasma shares are owned by institutional investors. Comparatively, 31.5% of Catalyst Biosciences shares are owned by institutional investors. 3.8% of Chiasma shares are owned by insiders. Comparatively, 5.0% of Catalyst Biosciences shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Catalyst Biosciences beats Chiasma on 7 of the 13 factors compared between the two stocks.

About Chiasma

Chiasma, Inc. is a biopharmaceutical company. The Company is engaged in developing and commercializing oral forms of therapies that are available only by injection. Using its Transient Permeability Enhancer (TPE) technology platform, the Company is developing oral therapies. The Company has completed a Phase III clinical trial of its TPE platform-based product candidate, oral octreotide capsules (trade named as MYCAPSSA) for the treatment of acromegaly, a condition that results in the body’s production of excess growth hormone. Octreotide is an analog of somatostatin, a natural inhibitor of growth hormone secretion. The Company is developing octreotide capsules as a liquid-filled solid gelatin capsule formulation, which is intended to be taken over twice a day. The Company’s TPE technology enhances the absorption through the intestinal wall of drugs. The Company also focuses on developing CH2 for Orphan indication.

About Catalyst Biosciences

Catalyst Biosciences, Inc., formerly Targacept, Inc., is a clinical-stage biopharmaceutical company. The Company is focused on creating and developing medicines to address serious medical conditions. The Company focuses its product development efforts in the fields of hemostasis, including the treatment of hemophilia and surgical bleeding, and inflammation, including prevention of delayed graft function (DGF) in renal transplants and the treatment of dry age-related macular degeneration (dry AMD), a condition that can cause visual impairment or blindness. The Company’s advanced program is a coagulation Factor VIIa variant, CB 813d, that has completed a Phase I clinical trial in severe hemophilia A and B patients. In addition to its lead Factor VIIa program, it has approximately two other coagulation factors, a Factor IX variant, CB 2679d/ISU 304, that is in advanced preclinical development, and a Factor Xa variant that has reached the advanced lead preclinical-stage of development.

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