Critical Review: Orexigen Therapeutics (OREX) and CLEMENTIA PHARM (CMTA)

Orexigen Therapeutics (NASDAQ: OREX) and CLEMENTIA PHARM (NASDAQ:CMTA) are both small-cap medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, profitability, dividends, earnings, valuation and institutional ownership.

Analyst Ratings

This is a summary of recent ratings and target prices for Orexigen Therapeutics and CLEMENTIA PHARM, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orexigen Therapeutics 0 0 0 0 N/A
CLEMENTIA PHARM 0 0 4 0 3.00

CLEMENTIA PHARM has a consensus target price of $27.00, indicating a potential upside of 58.82%. Given CLEMENTIA PHARM’s higher possible upside, analysts plainly believe CLEMENTIA PHARM is more favorable than Orexigen Therapeutics.

Profitability

This table compares Orexigen Therapeutics and CLEMENTIA PHARM’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orexigen Therapeutics -120.77% -824.15% -61.12%
CLEMENTIA PHARM N/A N/A N/A

Earnings and Valuation

This table compares Orexigen Therapeutics and CLEMENTIA PHARM’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Orexigen Therapeutics $63.39 million 0.57 -$163.64 million ($7.24) -0.32
CLEMENTIA PHARM N/A N/A N/A N/A N/A

CLEMENTIA PHARM has higher revenue, but lower earnings than Orexigen Therapeutics.

Institutional & Insider Ownership

39.7% of Orexigen Therapeutics shares are held by institutional investors. 13.3% of Orexigen Therapeutics shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

CLEMENTIA PHARM beats Orexigen Therapeutics on 5 of the 8 factors compared between the two stocks.

About Orexigen Therapeutics

Orexigen Therapeutics, Inc. is a biopharmaceutical company. The Company is focused on the treatment of obesity. The Company’s product, Contrave, is approved in the United States by the United States Food and Drug Administration as an adjunct to a reduced-calorie diet and increased physical activity for chronic weight management in adults with an initial body mass index (BMI) of 30 kilograms per square meter or greater (obese) or 27 kilograms per square meter or greater (overweight) in the presence of a weight-related comorbid condition. Contrave is a combination of generic drug components, each of which has received regulatory approval for other indications and has been commercialized in the United States and in a range of member countries of the European Union. Contrave regulates appetite and energy expenditure through central nervous system (CNS) activity. Contrave is a fixed dose combination of bupropion hydrochloride (HCl) extended release (ER) and naltrexone HCl ER.

About CLEMENTIA PHARM

Clementia Pharmaceuticals Inc. is a clinical stage biopharmaceutical company. The Company is engaged in developing disease-modifying treatments for patients suffering from debilitating bone and other diseases with high unmet medical need. Its lead product candidate, palovarotene, is an oral small molecule that binds and activates retinoic acid receptor gamma (an RARg agonist), and has activity in preventing abnormal new bone formation as well as scar tissue formation (or fibrosis) in a variety of tissues in animal models. It is developing palovarotene for the treatment of Fibrodysplasia Ossificans Progressiva (FOP) and Multiple Osteochondroma (MO). Its programs focus on diseases involving tissue transformation via retinoic acid receptors (RARs). The Company also has an eye drop formulation of palovarotene that can potently increase tear production and decrease corneal damage.

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