Analyzing Ritter Pharmaceuticals (RTTR) & Tocagen (TOCA)

Ritter Pharmaceuticals (NASDAQ: RTTR) and Tocagen (NASDAQ:TOCA) are both small-cap healthcare companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, risk, dividends and analyst recommendations.

Insider and Institutional Ownership

33.4% of Ritter Pharmaceuticals shares are owned by institutional investors. Comparatively, 37.2% of Tocagen shares are owned by institutional investors. 28.1% of Ritter Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Ritter Pharmaceuticals and Tocagen, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ritter Pharmaceuticals 0 1 4 0 2.80
Tocagen 0 0 2 0 3.00

Ritter Pharmaceuticals presently has a consensus price target of $2.50, suggesting a potential upside of 716.99%. Tocagen has a consensus price target of $23.67, suggesting a potential upside of 105.80%. Given Ritter Pharmaceuticals’ higher probable upside, equities analysts plainly believe Ritter Pharmaceuticals is more favorable than Tocagen.

Profitability

This table compares Ritter Pharmaceuticals and Tocagen’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ritter Pharmaceuticals N/A -480.51% -235.87%
Tocagen -89,078.05% N/A -51.70%

Earnings and Valuation

This table compares Ritter Pharmaceuticals and Tocagen’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ritter Pharmaceuticals N/A N/A -$18.38 million ($1.16) -0.26
Tocagen $40,000.00 5,695.38 -$33.47 million ($2.00) -5.75

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

Summary

Ritter Pharmaceuticals beats Tocagen on 7 of the 12 factors compared between the two stocks.

About Ritter Pharmaceuticals

Ritter Pharmaceuticals, Inc. develops therapeutic products that modulate the human gut microbiome to treat gastrointestinal diseases. The Company’s segment is focusing on the development and commercialization of RP-G28. The Company conducts human gut health research by exploring metabolic capacity of the gut microbiota and translating the functionality of prebiotic-based therapeutics into applications intended to have impact on a patient’s health. The Company’s compound, RP-G28, is under development for the treatment of lactose intolerance. The Company has completed a Phase IIa clinical trial of its product candidate, RP-G28, an orally administered oligosaccharide. RP-G28 is designed to stimulate the growth of lactose-metabolizing bacteria in the colon. The Company has not generated any revenues.

About Tocagen

Tocagen Inc. (Tocagen) is a clinical-stage, cancer-selective gene therapy company. The Company is focused on developing product candidates designed to activate a patient’s immune system against their own cancer. Its cancer-selective gene therapy platform is built on retroviral replicating vectors (RRVs), which are designed to selectively deliver therapeutic genes into the deoxyribonucleic acid (DNA) of cancer cells. Its lead product candidates are vocimagene amiretrorepvec (Toca 511) and flucytosine extended release (Toca FC). Toca 511 is an investigational injectable retroviral replicating vector (RRV) that encodes a prodrug activator enzyme, cytosine deaminase (CD). Toca FC is an investigational extended-release version of 5-fluorocytosine (5-FC), a prodrug that is inactive as an anti-cancer drug. As of February, 2017, Tocagen has completed enrollment of the Phase II portion with 187 patients.

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