Dendreon (NASDAQ: DNDN) and XOMA Corporation (NASDAQ:XOMA) are both small-cap healthcare companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Earnings & Valuation

This table compares Dendreon and XOMA Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Dendreon N/A N/A N/A ($1.06) -0.03
XOMA Corporation $5.56 million 44.65 -$53.53 million ($3.26) -9.36

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

Profitability

This table compares Dendreon and XOMA Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dendreon -30.18% N/A -25.12%
XOMA Corporation -3.51% -1.14% 0.95%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Dendreon and XOMA Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dendreon 0 0 0 0 N/A
XOMA Corporation 0 2 2 0 2.50

XOMA Corporation has a consensus price target of $28.50, suggesting a potential downside of 6.56%. Given XOMA Corporation’s higher probable upside, analysts plainly believe XOMA Corporation is more favorable than Dendreon.

Institutional and Insider Ownership

30.7% of XOMA Corporation shares are owned by institutional investors. 3.0% of XOMA Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

XOMA Corporation beats Dendreon on 7 of the 9 factors compared between the two stocks.

About Dendreon

Dendreon Corporation, is a biotechnology company. The Company is focused on discovery, development and commercialization of therapeutics for cancer treatment. The Company’s product portfolio includes cellular immunotherapies and small molecule product candidate that could be applicable to treating multiple types of cancers. The Company’s product PROVENGE (sipuleucel-T), is an autologous cellular immunotherapy for the treatment of asymptomatic and minimally symptomatic, metastatic, castrate-resistant hormone-refractory prostate cancer. Other potential product candidates include investigational active cellular immunotherapy, which potentially may be used for the treatment of patients with bladder, breast, ovarian and other solid tumors expressing HER2/neu; active cellular immunotherapies directed at carbonic anhydrase 9, an antigen highly expressed in renal cell carcinoma, and carcinoembryonic antigen, an antigen expressed in colorectal and other cancers.

About XOMA Corporation

XOMA Corporation is a development-stage biotechnology company. The Company focuses on the discovery and development of monoclonal antibody-based therapeutics. It has five products in its endocrine portfolio, two of which are developed as part of its XOMA Metabolism (XMet) platform. Its products include XOMA 358, XOMA 129, XOMA 213 and Gevokizumab. Its XOMA 358 is meant for long-acting treatment of hyperinsulinemic hypoglycemia. XOMA 129 is meant for rapid onset, short-acting treatment of severe acute hypoglycemia. XOMA 213 is a Phase II-ready product candidate targeting the prolactin receptor, as well as research-stage programs targeting the parathyroid receptor (PTH1R) and the adrenal corticotropic hormone (ACTH). Gevokizumab is a humanized monoclonal antibody with allosteric properties that has the potential to treat patients with a range of inflammatory diseases. Its technologies include Antibody Discovery Advanced Platform Technologies (ADAPT), ModulX and OptimX.

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