MannKind Corporation (NASDAQ: MNKD) and DURECT Corporation (NASDAQ:DRRX) are both small-cap medical companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, valuation, profitability, earnings and institutional ownership.

Earnings & Valuation

This table compares MannKind Corporation and DURECT Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
MannKind Corporation $179.93 million 1.15 $60.33 million $1.34 1.48
DURECT Corporation $16.15 million 15.75 -$33.04 million ($0.25) -6.92

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

Profitability

This table compares MannKind Corporation and DURECT Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MannKind Corporation 71.60% -24.93% 57.11%
DURECT Corporation -221.01% -629.35% -85.43%

Volatility and Risk

MannKind Corporation has a beta of 3.16, meaning that its stock price is 216% more volatile than the S&P 500. Comparatively, DURECT Corporation has a beta of 1.88, meaning that its stock price is 88% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for MannKind Corporation and DURECT Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MannKind Corporation 2 0 1 0 1.67
DURECT Corporation 0 0 3 0 3.00

MannKind Corporation presently has a consensus price target of $0.92, indicating a potential downside of 53.79%. DURECT Corporation has a consensus price target of $3.17, indicating a potential upside of 83.04%. Given DURECT Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe DURECT Corporation is more favorable than MannKind Corporation.

Institutional & Insider Ownership

15.7% of MannKind Corporation shares are held by institutional investors. Comparatively, 45.8% of DURECT Corporation shares are held by institutional investors. 1.4% of MannKind Corporation shares are held by insiders. Comparatively, 10.3% of DURECT Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

MannKind Corporation beats DURECT Corporation on 7 of the 13 factors compared between the two stocks.

MannKind Corporation Company Profile

MannKind Corporation is a biopharmaceutical company. The Company is focused on the discovery and development of therapeutic products for diseases, such as diabetes. Its product candidate is AFREZZA, which is an inhaled insulin used to control high blood sugar in adults with type I and type II diabetes and helps in glycemic control. AFREZZA consists of a dry formulation of human insulin delivered from a portable inhaler. AFREZZA utilizes its Technosphere formulation technology. Technosphere is a drug delivery platform that may allow the oral inhalation of a range of therapeutics. Technosphere powders are based on the Company’s fumaryl diketopiperazine (FDKP), which is a potential of Hydrogen (pH)-sensitive organic molecule that self-assembles into small particles under acidic conditions. The Company has also created a range of breath-powered, dry powder inhalers. Its inhalers can be produced in both a reusable (chronic treatment) and a single-use (acute treatment) format.

DURECT Corporation Company Profile

Durect Corporation is a biopharmaceutical company with research and development programs. The Company’s products candidates include DUR-928, oral for metabolic/lipid disorders, and DUR-928, injectable for acute organ injuries. Its other product candidates include POSIMIR (controlled release injection of bupivacaine), REMOXY (oral controlled release oxycodone), ORADUR-ADHD, ELADUR (controlled release injection of bupivicane), Relday (risperidone), ORADUR-based opioid (hydromorphone) and SABER-based ophthalmic. The Company’s ALZET product line consists of miniature, implantable osmotic pumps and accessories used for experimental research in mice, rats and other laboratory animals. The Company also manufactures and sells osmotic pumps used in laboratory research and design; and develops and manufactures a range of standard and custom biodegradable polymers and excipients for pharmaceutical and medical device clients for use as raw materials in their products.

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