Head to Head Review: Otonomy (OTIC) versus GALAPAGOS NV/S (GLPG)

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Otonomy (NASDAQ:OTIC) and GALAPAGOS NV/S (NASDAQ:GLPG) are both medical companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Insider and Institutional Ownership

57.5% of Otonomy shares are owned by institutional investors. Comparatively, 15.8% of GALAPAGOS NV/S shares are owned by institutional investors. 11.7% of Otonomy shares are owned by insiders. Comparatively, 2.9% of GALAPAGOS NV/S shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Otonomy and GALAPAGOS NV/S’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Otonomy $750,000.00 114.56 -$50.37 million ($1.65) -1.70
GALAPAGOS NV/S $176.13 million 28.73 -$130.78 million ($2.64) -37.42

Otonomy has higher earnings, but lower revenue than GALAPAGOS NV/S. GALAPAGOS NV/S is trading at a lower price-to-earnings ratio than Otonomy, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Otonomy has a beta of 2.52, indicating that its stock price is 152% more volatile than the S&P 500. Comparatively, GALAPAGOS NV/S has a beta of 1.65, indicating that its stock price is 65% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Otonomy and GALAPAGOS NV/S, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Otonomy 1 0 3 0 2.50
GALAPAGOS NV/S 0 2 10 1 2.92

Otonomy currently has a consensus target price of $7.50, indicating a potential upside of 167.86%. GALAPAGOS NV/S has a consensus target price of $125.10, indicating a potential upside of 26.65%. Given Otonomy’s higher probable upside, equities research analysts clearly believe Otonomy is more favorable than GALAPAGOS NV/S.

Profitability

This table compares Otonomy and GALAPAGOS NV/S’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Otonomy -6,760.81% -53.29% -46.65%
GALAPAGOS NV/S -30.65% -7.66% -5.85%

Summary

Otonomy beats GALAPAGOS NV/S on 8 of the 15 factors compared between the two stocks.

About Otonomy

Otonomy, Inc., a biopharmaceutical company, engages in the development and commercialization of therapeutics for otology in the United States. It offers OTIPRIO, a ciprofloxacin otic suspension for use during tympanostomy tube placement surgery in pediatric patients. The company also develops OTIVIDEX, a sustained-exposure formulation of the steroid dexamethasone in Phase III clinical trial for the treatment of Ménière's disease; and OTO- 313, a sustained-exposure formulation of N-methyl-D-aspartate receptor antagonist gacyclidine, which has completed a Phase 1 clinical safety trial for the treatment of tinnitus. In addition, it develops OTO-413, a sustained exposure formulation of brain-derived neurotrophic factor for the repair of cochlear synaptopathy and the treatment of speech-in-noise hearing difficulties; OTO-5XX, an otoprotectant for the prevention of cisplatin-induced hearing loss; and OTO-6XX induces hair cell regeneration for the treatment of severe hearing loss. The company has license agreements with University of California and DURECT Corporation. Otonomy, Inc. was founded in 2008 and is headquartered in San Diego, California.

About GALAPAGOS NV/S

Galapagos NV, a clinical-stage biotechnology company, discovers, develops, and commercializes novel medicines. Its clinical stage programs include filgotinib, which is in Phase III clinical trials for the treatment of rheumatoid arthritis and Crohn's disease, Phase 2/3 trials for ulcerative colitis, and Phase II trials for multiple additional indications; GLPG1690, an autotaxin inhibitor, which is in Phase III clinical trial for the treatment of idiopathic pulmonary fibrosis; GLPG1972 that completed Phase 1b clinical trial for the treatment of osteoarthritis; and MOR106, which is in Phase II trials for atopic dermatitis patients. The company has collaboration agreement with Gilead Sciences, Inc. for the development of filgotinib for inflammatory indications; Servier to develop GLPG1972; AbbVie for the discovery, development, and commercialization of potentiator and corrector molecules for the treatment of cystic fibrosis, as well as with MorphoSys for MOR106; and Evotec AG for the novel target for fibrosis and other indications. Galapagos NV was founded in 1999 and is headquartered in Mechelen, Belgium.

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