Analyzing TScan Therapeutics (NASDAQ:TCRX) & Mereo BioPharma Group (NASDAQ:MREO)

Mereo BioPharma Group (NASDAQ:MREO) and TScan Therapeutics (NASDAQ:TCRX) are both small-cap healthcare companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Risk and Volatility

Mereo BioPharma Group has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500. Comparatively, TScan Therapeutics has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.

Insider and Institutional Ownership

62.8% of Mereo BioPharma Group shares are owned by institutional investors. Comparatively, 82.8% of TScan Therapeutics shares are owned by institutional investors. 6.5% of Mereo BioPharma Group shares are owned by insiders. Comparatively, 6.2% of TScan Therapeutics shares are owned by 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.

Profitability

This table compares Mereo BioPharma Group and TScan Therapeutics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mereo BioPharma Group	N/A	-74.82%	-64.28%
TScan Therapeutics	-1,655.35%	-108.72%	-54.47%

Analyst Recommendations

This is a breakdown of current ratings for Mereo BioPharma Group and TScan Therapeutics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mereo BioPharma Group	2	3	3	0	2.12
TScan Therapeutics	1	5	2	0	2.12

Mereo BioPharma Group currently has a consensus target price of $1.67, indicating a potential upside of 499.52%. TScan Therapeutics has a consensus target price of $2.67, indicating a potential upside of 735.95%. Given TScan Therapeutics’ higher probable upside, analysts clearly believe TScan Therapeutics is more favorable than Mereo BioPharma Group.

Valuation and Earnings

This table compares Mereo BioPharma Group and TScan Therapeutics”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mereo BioPharma Group	$500,000.00	88.79	-$41.88 million	($0.04)	-6.95
TScan Therapeutics	$10.32 million	2.10	-$129.77 million	($0.91)	-0.35

Mereo BioPharma Group has higher earnings, but lower revenue than TScan Therapeutics. Mereo BioPharma Group is trading at a lower price-to-earnings ratio than TScan Therapeutics, indicating that it is currently the more affordable of the two stocks.

Summary

Mereo BioPharma Group beats TScan Therapeutics on 7 of the 13 factors compared between the two stocks.

About Mereo BioPharma Group

Mereo BioPharma Group plc, a biopharmaceutical company, develops and commercializes therapeutics for the treatment of oncology and rare diseases in the United Kingdom, the United States, and internationally. It develops Etigilimab (MPH-313), an antibody T-cell immunoreceptor with Ig and ITIM domains, which is in Phase 1b clinical trial for the treatment of tumors. The company is also developing Navicixizumab (OMP-305B83), which has completed Phase 1b clinical trials for the treatment of the late line ovarian cancer; Acumapimod (BCT-197), a p38 MAP kinase inhibitor that is in Phase II clinical trials to treat acute exacerbations of chronic obstructive pulmonary disease; and Leflutrozole (BGS-649), an oral aromatase inhibitor for the treatment of hypogonadotropic hypogonadism which is in Phase 2 trials. In addition, it develops rare disease product candidates, including Setrusumab (BPS-804), an antibody for the treatment of osteogenesis imperfecta; and Alvelestat (MPH-966), an oral small molecule that is in Phase II clinical trial to treat Alpha-1 anti-trypsin deficiency. The company has a license agreement with Feng Biosciences for the development and commercialization of navicixizumab; license agreement with ReproNovo for the development and commercialization of leflutrozole; licensing agreement with AstraZeneca; and license agreement with Ultragenyx Pharmaceutical Inc. to develop and commercialize setrusumab. Mereo BioPharma Group plc was incorporated in 2015 and is headquartered in London, the United Kingdom.

About TScan Therapeutics

TScan Therapeutics, Inc., a clinical-stage biopharmaceutical company, develops T cell receptor-engineered T cell (TCR-T) therapies for the treatment of patients with cancer in the United States. The company's lead product candidates include TSC-100 and TSC-101 that is in Phase I clinical trial for the treatment of patients with hematologic malignancies to eliminate residual disease and prevent relapse after allogeneic hematopoietic cell transplantation. It also develops TSC-200, TSC-201, TSC-203, and TSC-204, which are in Phase 1 clinical trial, for the treatment of solid tumors; and TSC-202 to treat solid tumors. In addition, the company develops vaccines for infectious diseases, such as SARS-CoV-2. It has collaborations with Novartis Institutes for BioMedical Research, Inc. To discover and develop novel TCR-T therapies; and Amgen Inc. to identify antigens recognized by T cells in patients with Crohn's disease using TargetScan, a proprietary target discovery platform. TScan Therapeutics, Inc. was incorporated in 2018 and is headquartered in Waltham, Massachusetts.