PaxMedica (NASDAQ:PXMD – Get Free Report) and Cara Therapeutics (NASDAQ:CARA – Get Free Report) are both small-cap medical companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, analyst recommendations, risk and institutional ownership.
Risk and Volatility
PaxMedica has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500. Comparatively, Cara Therapeutics has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500.
Profitability
This table compares PaxMedica and Cara Therapeutics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| PaxMedica | N/A | -956.84% | -388.94% |
| Cara Therapeutics | -565.21% | -122.10% | -89.64% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| PaxMedica | 0 | 0 | 1 | 0 | 3.00 |
| Cara Therapeutics | 0 | 1 | 3 | 0 | 2.75 |
PaxMedica currently has a consensus price target of $3.00, suggesting a potential upside of 488.24%. Cara Therapeutics has a consensus price target of $9.75, suggesting a potential upside of 971.43%. Given Cara Therapeutics’ higher probable upside, analysts clearly believe Cara Therapeutics is more favorable than PaxMedica.
Earnings and Valuation
This table compares PaxMedica and Cara Therapeutics’ gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| PaxMedica | N/A | N/A | -$18.29 million | ($24.42) | -0.02 |
| Cara Therapeutics | $20.97 million | 2.37 | -$118.51 million | ($2.18) | -0.42 |
PaxMedica has higher earnings, but lower revenue than Cara Therapeutics. Cara Therapeutics is trading at a lower price-to-earnings ratio than PaxMedica, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
4.9% of PaxMedica shares are held by institutional investors. Comparatively, 44.7% of Cara Therapeutics shares are held by institutional investors. 57.9% of PaxMedica shares are held by company insiders. Comparatively, 4.2% of Cara Therapeutics shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Summary
Cara Therapeutics beats PaxMedica on 8 of the 13 factors compared between the two stocks.
About PaxMedica
PaxMedica, Inc., a clinical stage biopharmaceutical company, focuses on the development of anti-purinergic drug therapies for the treatment of disorders with intractable neurologic symptoms. The company's lead product candidate is PAX-101, an intravenous formulation of suramin for the treatment of autism spectrum disorder, myalgic encephalomyelitis/chronic fatigue syndrome, long COVID-19 syndrome, and human African trypanosomiasis (HAT). It also develops PAX-102, an intranasal formulation of suramin, as well as other new chemical entities that are targeted and selective antagonists of purine receptor subtypes; and PAX-HAT-301 for the treatment of HAT. The company was formerly known as Purinix Pharmaceuticals LLC and changed its name to PaxMedica, Inc. in April 2020. PaxMedica, Inc. was incorporated in 2018 and is based in Tarrytown, New York.
About Cara Therapeutics
Cara Therapeutics, Inc., a development-stage biopharmaceutical company, focuses on developing and commercializing therapeutics treatment of chronic pruritus in the United States. The company's lead product is KORSUVA (difelikefalin) injection for the treatment of moderate-to-severe pruritus associated with chronic kidney disease (CKD) in adults undergoing hemodialysis. It also develops Oral difelikefalin, which is in Phase II/III clinical trial to treat chronic pruritus with notalgia paresthetica. The company has license agreements with Maruishi Pharmaceutical Co., Ltd to develop, manufacture, and commercialize drug products containing difelikefalin for acute pain and uremic pruritus in Japan; Vifor Fresenius Medical Care Renal Pharma Ltd. development and commercialization of KORSUVA injection for the treatment of moderate-to-severe pruritus in adult patients undergoing hemodialysis; and Chong Kun Dang Pharmaceutical Corporation to develop, manufacture, and commercialize drug products containing difelikefalin in South Korea. Cara Therapeutics, Inc. was incorporated in 2004 and is based in Stamford, Connecticut.
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