Financial Analysis: OncoSec Medical (NASDAQ:ONCS) versus Nektar Therapeutics (NKTR)

OncoSec Medical (NASDAQ: ONCS) and Nektar Therapeutics (NASDAQ:NKTR) are both healthcare companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Profitability

This table compares OncoSec Medical and Nektar Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
OncoSec Medical N/A -144.61% -110.75%
Nektar Therapeutics -42.08% -190.68% -19.50%

Risk & Volatility

OncoSec Medical has a beta of 3.27, suggesting that its stock price is 227% more volatile than the S&P 500. Comparatively, Nektar Therapeutics has a beta of 1.81, suggesting that its stock price is 81% more volatile than the S&P 500.

Insider and Institutional Ownership

5.2% of OncoSec Medical shares are owned by institutional investors. Comparatively, 96.0% of Nektar Therapeutics shares are owned by institutional investors. 5.5% of OncoSec Medical shares are owned by company insiders. Comparatively, 5.4% of Nektar Therapeutics shares are owned by company 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.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for OncoSec Medical and Nektar Therapeutics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OncoSec Medical 0 0 4 0 3.00
Nektar Therapeutics 0 1 12 0 2.92

OncoSec Medical presently has a consensus price target of $5.33, suggesting a potential upside of 183.69%. Nektar Therapeutics has a consensus price target of $36.64, suggesting a potential downside of 46.15%. Given OncoSec Medical’s stronger consensus rating and higher possible upside, analysts plainly believe OncoSec Medical is more favorable than Nektar Therapeutics.

Valuation and Earnings

This table compares OncoSec Medical and Nektar Therapeutics’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
OncoSec Medical N/A N/A -$21.44 million ($1.03) -1.83
Nektar Therapeutics $165.44 million 64.75 -$153.52 million ($0.71) -95.82

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

Summary

OncoSec Medical beats Nektar Therapeutics on 8 of the 13 factors compared between the two stocks.

OncoSec Medical Company Profile

OncoSec Medical Incorporated is a biotechnology company. The Company is focused on designing, developing and commercializing gene therapies, therapeutics and medical approaches to stimulate an anti-tumor immune response for the treatment of cancer. The Company’s lead product candidate, ImmunoPulse IL-12, consists of a plasmid construct encoding the proinflammatory cytokine, IL-12, which is delivered into the tumor through in vivo electroporation. As of July 31, 2016, the Company was pursuing two Phase II trials: ImmunoPulse IL-12 monotherapy in patients with metastatic melanoma and ImmunoPulse IL-12 plus pembrolizumab in patients with advanced, metastatic melanoma. In addition, it is pursuing ImmunoPulse IL-12 monotherapy in patients with triple negative breast cancer. Its ImmunoPulse product candidates are based on its deoxyribonucleic acid (DNA)-based immunotherapy technology, which is designed to stimulate the human immune system, resulting in systemic anti-tumor immune responses.

Nektar Therapeutics Company Profile

Nektar Therapeutics is a biopharmaceutical company that discovers and develops medicines in areas of high unmet medical need. The Company’s research and development pipeline of new investigational drugs includes treatments for cancer, auto-immune disease and chronic pain. It leverages its chemistry platform to discover and design new drug candidates. These drug candidates utilize its polymer conjugate technology platforms, which are designed to enable the development of new molecular entities that target known mechanisms of action. Its programs include Immuno-oncology (I-O), Immunology, Pain-NKTR-181 and Oncology-ONZEALD. It is developing medicines designed to directly or indirectly modulate the activity of key immune cells, such as cytotoxic T cells and Natural Killer (NK) cells, to increase their numbers and improve their function to recognize and attack cancer cells.

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