Loxo Oncology (NASDAQ:LOXO) and HUTCHISON CHINA/S (NASDAQ:HCM) are both mid-cap medical companies, but which is the better business? We will compare the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Earnings & Valuation

This table compares Loxo Oncology and HUTCHISON CHINA/S’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Loxo Oncology $21.30 million 194.01 -$148.87 million ($5.31) -25.42
HUTCHISON CHINA/S $241.20 million 17.43 -$26.73 million ($0.22) -143.73

HUTCHISON CHINA/S has higher revenue and earnings than Loxo Oncology. HUTCHISON CHINA/S is trading at a lower price-to-earnings ratio than Loxo Oncology, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Loxo Oncology and HUTCHISON CHINA/S’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Loxo Oncology -43.49% -16.42% -8.66%
HUTCHISON CHINA/S N/A N/A N/A

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Loxo Oncology and HUTCHISON CHINA/S, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Loxo Oncology 0 2 12 1 2.93
HUTCHISON CHINA/S 0 0 0 0 N/A

Loxo Oncology currently has a consensus target price of $188.27, suggesting a potential upside of 39.46%. Given Loxo Oncology’s higher probable upside, research analysts plainly believe Loxo Oncology is more favorable than HUTCHISON CHINA/S.

Risk and Volatility

Loxo Oncology has a beta of 2.21, suggesting that its share price is 121% more volatile than the S&P 500. Comparatively, HUTCHISON CHINA/S has a beta of 0.01, suggesting that its share price is 99% less volatile than the S&P 500.

Insider & Institutional Ownership

96.8% of Loxo Oncology shares are held by institutional investors. Comparatively, 11.8% of HUTCHISON CHINA/S shares are held by institutional investors. 17.1% of Loxo Oncology shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Loxo Oncology beats HUTCHISON CHINA/S on 8 of the 14 factors compared between the two stocks.

About Loxo Oncology

Loxo Oncology, Inc., a biopharmaceutical company, develops and sells medicines for patients with genetically defined cancers in the United States. Its lead product candidate comprises larotrectinib, an oral selective inhibitor of tropomyosin receptor kinase (TRK), which is in adult Phase 1 trial, a pediatric Phase 1/2 trial, and an adult/adolescent Phase 2 trial for the treatment of patients with tumor types, such as lung, head and neck, melanoma, colorectal, sarcoma, and breast cancer. The company's preclinical programs include LOXO-195, a drug candidate in preclinical development to address predicted acquired resistance mechanisms; RET inhibitor that optimizes potency for rearranged during transfection (RET) fusion proteins, mutations, and anticipated mechanisms of acquired resistance; and FGFR inhibitor that enables potently inhibiting FGFR isoforms comprising four isoforms with tyrosine kinase domains. It has a drug discovery collaboration agreement with Array BioPharma, Inc. to obtain various rights to TRK inhibitor program and oncology targets; strategic partnership with Illumina, Inc. to develop and commercialize a multi-gene panel for broad tumor profiling; and research collaboration agreement with Veracyte, Inc. to develop medicines for patients with genetically defined cancers. Loxo Oncology, Inc. was founded in 2013 and is headquartered in Stamford, Connecticut.

About HUTCHISON CHINA/S

Hutchison China MediTech Limited, a biopharmaceutical company, engages in the research, development, manufacture, and sale of pharmaceuticals and healthcare products primarily in the People's Republic of China and Hong Kong. It operates through Innovation Platform and Commercial Platform segments. The company discovers and develops therapeutics in oncology and autoimmune diseases, as well as provides research and development services; and develops, manufactures, distributes, markets, and sells prescription and over-the-counter pharmaceutical products, and consumer health products under the Baiyunshan and Shang Yao brands. Its clinical drug candidates include Savolitinib, an inhibitor for treating non-small cell lung, colorectal, and gastric cancer, as well as papillary renal cell carcinoma; Fruquintinib, an oral inhibitor for the treatment of colorectal, non-small cell lung, and gastric cancer; Sulfatinib for treating neuroendocrine tumors, and thyroid and biliary tract cancer; and Epitinib for the treatment of non-small cell lung cancer, as well as for patients with glioblastoma. The company also develops Theliatinib epidermal growth factor receptor inhibitor for treating solid tumors, as well as for patients with esophageal cancer; HMPL-523, an oral inhibitor for the treatment of immunology, rheumatoid arthritis, and hematological cancers; HMPL-689, a small molecule inhibitor for the treatment of hematologic cancers, autoimmunity and transplant organ rejection, and other related inflammation diseases; HMPL-453, a small molecule inhibitor for the treatment of solid tumors; and HMPL-004 for the treatment of ulcerative colitis and Crohn's disease. It has strategic alliances with AstraZeneca AB (publ); Eli Lilly and Company; and Nestlé Health Science SA. The company was founded in 2000 and is headquartered in Central, Hong Kong. Hutchison China MediTech Limited is a subsidiary of Hutchison Healthcare Holdings Limited.

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