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

Valuation & Earnings

This table compares DURECT and Clementia Pharmaceuticals’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DURECT $49.17 million 2.08 -$3.69 million ($0.03) -21.00
Clementia Pharmaceuticals N/A N/A -$115.45 million ($7.93) -1.67

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

Profitability

This table compares DURECT and Clementia Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DURECT -28.39% -36.86% -17.25%
Clementia Pharmaceuticals N/A -40.69% -38.18%

Analyst Ratings

This is a breakdown of current recommendations and price targets for DURECT and Clementia Pharmaceuticals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DURECT 0 0 1 0 3.00
Clementia Pharmaceuticals 0 0 5 0 3.00

DURECT presently has a consensus target price of $3.00, indicating a potential upside of 376.19%. Clementia Pharmaceuticals has a consensus target price of $23.00, indicating a potential upside of 73.58%. Given DURECT’s higher possible upside, equities research analysts plainly believe DURECT is more favorable than Clementia Pharmaceuticals.

Institutional & Insider Ownership

47.1% of DURECT shares are held by institutional investors. Comparatively, 76.1% of Clementia Pharmaceuticals shares are held by institutional investors. 9.7% of DURECT shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

DURECT has a beta of 1.82, suggesting that its share price is 82% more volatile than the S&P 500. Comparatively, Clementia Pharmaceuticals has a beta of -0.05, suggesting that its share price is 105% less volatile than the S&P 500.

Summary

DURECT beats Clementia Pharmaceuticals on 8 of the 12 factors compared between the two stocks.

DURECT Company Profile

DURECT Corporation, a biopharmaceutical company, researches and develops medicines based on its epigenetic regulator and drug delivery programs. The company offers ALZET product line that consists of osmotic pumps and accessories used for experimental research in mice, rats, and other laboratory animals; and a range of biodegradable polymers for use as raw materials in their products for pharmaceutical and medical devices under the LACTEL brand. Its product pipeline consists of multiple investigational drug candidates in clinical development, such as DUR-928, an endogenous, orally bioavailable small molecule that is in Phase II development stage to play a regulatory role in lipid homeostasis, inflammation, and cell survival. The company's advanced oral and injectable delivery technologies are designed to enable new indications and enhanced attributes for small-molecule and biologic drugs, including REMOXY ER, an investigational extended release pain relief drug based on ORADUR technology; and POSIMIR, an investigational analgesic product intended to deliver bupivacaine to provide up to 3 days of pain relief after surgery. DURECT Corporation markets and sells its ALZET and LACTEL product lines through direct sales force in the United States, as well as through a network of distributors in Japan, Europe, and internationally. The company has collaboration agreements with Sandoz AG; Indivior UK Ltd.; Santen Pharmaceutical Co., Ltd.; Zogenix, Inc.; and Pain Therapeutics, Inc. DURECT Corporation was founded in 1998 and is headquartered in Cupertino, California.

Clementia Pharmaceuticals Company Profile

Clementia Pharmaceuticals Inc., a clinical stage biopharmaceutical company, develops treatments for patients suffering from bone disorders and other diseases. Its lead product candidate is palovarotene, an oral small molecule for the treatment of fibrodysplasia ossificans progressive, multiple osteochondromas, dry eye disease, and other diseases is in the Phase 3 MOVE Trial. Clementia Pharmaceuticals Inc. was founded in 2010 and is based in Montreal, Canada.

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