Lannett (LCI) versus Aquinox Pharmaceuticals (AQXP) Financial Comparison

Aquinox Pharmaceuticals (NASDAQ: AQXP) and Lannett (NYSE:LCI) are both small-cap healthcare companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, profitability, earnings, dividends and valuation.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Aquinox Pharmaceuticals and Lannett, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aquinox Pharmaceuticals 0 0 3 0 3.00
Lannett 0 3 2 0 2.40

Aquinox Pharmaceuticals currently has a consensus target price of $25.00, indicating a potential upside of 115.52%. Lannett has a consensus target price of $21.50, indicating a potential downside of 10.60%. Given Aquinox Pharmaceuticals’ stronger consensus rating and higher possible upside, analysts clearly believe Aquinox Pharmaceuticals is more favorable than Lannett.

Valuation & Earnings

This table compares Aquinox Pharmaceuticals and Lannett’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Aquinox Pharmaceuticals N/A N/A -$37.00 million ($1.93) -6.01
Lannett $633.34 million 1.43 -$580,000.00 $1.12 21.47

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

Profitability

This table compares Aquinox Pharmaceuticals and Lannett’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aquinox Pharmaceuticals N/A -34.72% -32.69%
Lannett 6.67% 18.23% 6.16%

Volatility and Risk

Aquinox Pharmaceuticals has a beta of -16.96, indicating that its stock price is 1,796% less volatile than the S&P 500. Comparatively, Lannett has a beta of 2.85, indicating that its stock price is 185% more volatile than the S&P 500.

Insider and Institutional Ownership

96.3% of Aquinox Pharmaceuticals shares are owned by institutional investors. Comparatively, 97.2% of Lannett shares are owned by institutional investors. 2.7% of Aquinox Pharmaceuticals shares are owned by insiders. Comparatively, 14.7% of Lannett shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Lannett beats Aquinox Pharmaceuticals on 10 of the 13 factors compared between the two stocks.

Aquinox Pharmaceuticals Company Profile

Aquinox Pharmaceuticals, Inc. is a clinical-stage pharmaceutical company discovering and developing targeted therapeutics in disease areas of inflammation and immuno-oncology. The Company’s primary focus is anti-inflammatory product candidates targeting the Src Homology 2 (SH2)-containing inositol-5-phosphatase 1 (SHIP1) enzyme, which is a regulator of a cellular signaling pathway in immune cells, known as the phosphatidylinositol-4,5-bisphosphate 3-kinase (PI3K) pathway. Its product candidate, AQX-1125, is a small molecule activator of SHIP1 suitable for oral, once daily dosing. The Company is developing AQX-1125 as a treatment in interstitial cystitis/bladder pain syndrome (IC/BPS), a chronic inflammatory disease of the bladder. AQX-1125 is a SHIP1 activator that has demonstrated preliminary safety, anti-inflammatory potential and drug properties in multiple preclinical studies.

Lannett Company Profile

Lannett Company, Inc. develops, manufactures, markets and distributes generic versions of brand pharmaceutical products. The Company manufactures and/or distributes prescription products with the exception of a small portfolio of over-the-counter products manufactured by its subsidiary, Silarx Pharmaceuticals, Inc. As of June 30, 2016, the Company’s products included Acetazolamide Tablets; Butalbital, Acetaminophen and Caffeine Tablets; Butalbital, Aspirin and Caffeine Capsules; C-Topical Solution; Digoxin Tablets; Glycolax Rx; Isosorbide Mononitrate CR; Levothyroxine Sodium Tablets; Methylphenidate HCL CD; Methylphenidate ER; Nifedipine CR; Omeprazole DR; Oxbutynin ER; Pantoprazole DR; Pilocarpine HCl Tablets; Triamterene w/Hydrochlorothiazide Capsules, and Ursodiol Capsules. The Company has additional products under development, which are orally administered solid oral-dosage products (tablet/capsule) or oral solutions, nasal, topicals or parentarels, as well as other dosage forms.

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