Theravance Biopharma (NASDAQ: TBPH) and Pacira Pharmaceuticals (NASDAQ:PCRX) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Profitability

This table compares Theravance Biopharma and Pacira Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Theravance Biopharma -1,604.87% -99.43% -47.10%
Pacira Pharmaceuticals -18.25% -13.77% -6.34%

Valuation and Earnings

This table compares Theravance Biopharma and Pacira Pharmaceuticals’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Theravance Biopharma $48.65 million 31.49 -$190.66 million ($5.17) -5.48
Pacira Pharmaceuticals $276.37 million 5.69 -$37.94 million ($1.31) -29.58

Pacira Pharmaceuticals has higher revenue and earnings than Theravance Biopharma. Pacira Pharmaceuticals is trading at a lower price-to-earnings ratio than Theravance Biopharma, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

86.3% of Theravance Biopharma shares are owned by institutional investors. 6.1% of Theravance Biopharma shares are owned by insiders. Comparatively, 6.6% of Pacira Pharmaceuticals shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Theravance Biopharma and Pacira Pharmaceuticals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Theravance Biopharma 1 0 5 0 2.67
Pacira Pharmaceuticals 1 8 10 0 2.47

Theravance Biopharma presently has a consensus target price of $42.67, suggesting a potential upside of 50.66%. Pacira Pharmaceuticals has a consensus target price of $49.50, suggesting a potential upside of 27.74%. Given Theravance Biopharma’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Theravance Biopharma is more favorable than Pacira Pharmaceuticals.

Volatility & Risk

Theravance Biopharma has a beta of 2.1, suggesting that its share price is 110% more volatile than the S&P 500. Comparatively, Pacira Pharmaceuticals has a beta of 2.2, suggesting that its share price is 120% more volatile than the S&P 500.

Summary

Pacira Pharmaceuticals beats Theravance Biopharma on 9 of the 13 factors compared between the two stocks.

Theravance Biopharma Company Profile

Theravance Biopharma, Inc. is a biopharmaceutical company. The Company is engaged in creating medicines for patients suffering from serious illness. The Company operates in the segment of discovery (research), development and commercialization of human therapeutics. The Company’s pipeline of internally discovered product candidates includes medicines to address the unmet needs of patients being treated for serious conditions primarily in the acute care setting. Its commercial product VIBATIV (telavancin) is a once-daily dual-mechanism antibiotic approved in the United States and Europe for certain difficult-to-treat infections. Its Revefenacin (TD-4208) is a long-acting muscarinic antagonist (LAMA) being developed as a nebulized treatment for chronic obstructive pulmonary disease. Its neprilysin (NEP) inhibitor program is designed to develop selective NEP inhibitors for the treatment of a range of cardiovascular and renal diseases.

Pacira Pharmaceuticals Company Profile

Pacira Pharmaceuticals, Inc. is a holding company. The Company is a pharmaceutical company focused on the development, manufacture and commercialization of pharmaceutical products, based on its DepoFoam extended release drug delivery technology, for use primarily in hospitals and ambulatory surgery centers. Its lead product candidate is EXPAREL (bupivacaine liposome injectable suspension), which consists of bupivacaine, an amide-type local anesthetic, encapsulated in DepoFoam and is indicated for single-dose infiltration into the surgical site to produce postsurgical analgesia. In addition to EXPAREL, DepoFoam is also the basis for its other Food and Drug Administration-approved commercial product, DepoCyt(e), which it manufactures for its commercial partners, as well as its product candidates. The Company’s other product candidates include DepoMeloxicam (DepoMLX) and DepoTranexamic Acid (DepoTXA). DepoCyt(e) is indicated for the intrathecal treatment of lymphomatous meningitis.

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