Lexicon Pharmaceuticals (NASDAQ:LXRX – Get Free Report) and Puma Biotechnology (NASDAQ:PBYI – Get Free Report) are both small-cap healthcare companies, but which is the better business? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, valuation, analyst recommendations and institutional ownership.
Risk & Volatility
Lexicon Pharmaceuticals has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500. Comparatively, Puma Biotechnology has a beta of 1.22, meaning that its stock price is 22% more volatile than the S&P 500.
Valuation & Earnings
This table compares Lexicon Pharmaceuticals and Puma Biotechnology”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Lexicon Pharmaceuticals | $49.80 million | 15.73 | -$50.34 million | ($0.15) | -11.73 |
| Puma Biotechnology | $228.40 million | 2.22 | $31.11 million | $0.52 | 18.87 |
Puma Biotechnology has higher revenue and earnings than Lexicon Pharmaceuticals. Lexicon Pharmaceuticals is trading at a lower price-to-earnings ratio than Puma Biotechnology, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Lexicon Pharmaceuticals and Puma Biotechnology’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lexicon Pharmaceuticals | -147.38% | -37.53% | -24.96% |
| Puma Biotechnology | 11.50% | 20.76% | 13.22% |
Institutional & Insider Ownership
74.7% of Lexicon Pharmaceuticals shares are held by institutional investors. Comparatively, 61.3% of Puma Biotechnology shares are held by institutional investors. 14.0% of Lexicon Pharmaceuticals shares are held by company insiders. Comparatively, 22.2% of Puma Biotechnology shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Lexicon Pharmaceuticals and Puma Biotechnology, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lexicon Pharmaceuticals | 1 | 1 | 3 | 0 | 2.40 |
| Puma Biotechnology | 0 | 2 | 0 | 0 | 2.00 |
Lexicon Pharmaceuticals presently has a consensus target price of $5.70, indicating a potential upside of 223.86%. Puma Biotechnology has a consensus target price of $6.00, indicating a potential downside of 38.84%. Given Lexicon Pharmaceuticals’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Lexicon Pharmaceuticals is more favorable than Puma Biotechnology.
Summary
Puma Biotechnology beats Lexicon Pharmaceuticals on 9 of the 14 factors compared between the two stocks.
About Lexicon Pharmaceuticals
Lexicon Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the discovery, development, and commercialization of pharmaceutical products. Its orally-delivered small molecule drug candidates under development comprise Sotagliflozin that completed Phase III clinical trials for the for the treatment of heart failure and type 1 diabetes; and LX9211, which is in Phase II clinical development for the treatment of neuropathic pain and LX2761, which is in Phase I clinical development for gastrointestinal tract. Lexicon Pharmaceuticals, Inc. has strategic collaboration and license agreements with Bristol-Myers Squibb Company and Genentech, Inc. The company was incorporated in 1995 and is headquartered in The Woodlands, Texas.
About Puma Biotechnology
Puma Biotechnology, Inc., a biopharmaceutical company, focuses on the development and commercialization of products to enhance cancer care in the United States and internationally. The company offers NERLYNX, an oral version of neratinib that is used to treat adult patients with early stage HER2-overexpressed/amplified breast cancer; and advanced or metastatic HER2-positive breast cancer when combined with capecitabine. It also develops alisertib, a small molecule inhibitor of aurora kinase A for the treatment of hormone receptor positive breast cancer, triple negative breast cancer, small cell lung cancer, and head and neck cancer. The company sells its products through specialty pharmacy and distributor networks. It has license agreements with Pfizer Inc. for the development, manufacture, and commercialization of neratinib (oral), neratinib (intravenous), PB357, and related compounds; and Takeda Pharmaceutical Company Limited for the research, development, and commercialization of alisertib, as well as sub-license agreements with Specialised Therapeutics Asia Pte Ltd., Medison Pharma Ltd., Pint Pharma International SA, Knight Therapeutics, Inc., Pierre Fabre Medicament SAS, and Bixink Therapeutics Co., Ltd. The company was founded in 2010 and is headquartered in Los Angeles, California.
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