XBiotech (XBIT) versus Achaogen (AKAO) Critical Analysis

Achaogen (NASDAQ: AKAO) and XBiotech (NASDAQ:XBIT) are both small-cap medical companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Institutional and Insider Ownership

77.4% of Achaogen shares are owned by institutional investors. Comparatively, 9.4% of XBiotech shares are owned by institutional investors. 8.4% of Achaogen shares are owned by company insiders. Comparatively, 35.7% of XBiotech shares are owned 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.

Risk & Volatility

Achaogen has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500. Comparatively, XBiotech has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500.

Valuation and Earnings

This table compares Achaogen and XBiotech’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Achaogen $11.18 million 53.54 -$125.61 million ($3.17) -4.22
XBiotech N/A N/A -$33.15 million N/A N/A

XBiotech has lower revenue, but higher earnings than Achaogen.

Profitability

This table compares Achaogen and XBiotech’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Achaogen -1,124.10% -83.14% -52.31%
XBiotech N/A -46.91% -44.34%

Analyst Recommendations

This is a breakdown of current ratings for Achaogen and XBiotech, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Achaogen 0 0 10 0 3.00
XBiotech 0 0 1 0 3.00

Achaogen presently has a consensus price target of $23.13, indicating a potential upside of 72.77%. Given Achaogen’s higher probable upside, equities research analysts plainly believe Achaogen is more favorable than XBiotech.

Achaogen Company Profile

Achaogen, Inc., a late-stage biopharmaceutical company, focusses on the discovery, development, and commercialization of antibacterial treatments against multi-drug resistant (MDR) gram-negative infections in the United States. The company is principally developing plazomicin for the treatment of serious bacterial infections, including urinary tract infections, blood stream infections, and other infections due to MDR enterobacteriaceae comprising carbapenem-resistant enterobacteriaceae. It is also involved in the development of antibacterial candidate C-Scape, an orally-administered combination of clavulanate and ceftibuten, which targets serious bacterial infections due to expanded spectrum beta-lactamases producing enterobacteriaceae; and therapeutic antibody discovery program. The company has license and collaboration agreements with Thermo Fisher Scientific, Inc. to develop and commercialize an assay to support plazomicin; Crystal Biosciences, Inc. to discover monoclonal antibodies against multiple targets; Ionis Pharmaceuticals, Inc. for certain patents relating to aminoglycoside antibacterial compounds and related know-how to develop and commercialize certain novel aminoglycoside antibacterial compounds; and Hovione Limited to manufacture the active pharmaceutical ingredient for plazomicin. The company was incorporated in 2002 and is based in South San Francisco, California.

XBiotech Company Profile

XBiotech Inc., a pre-market biopharmaceutical company, engages in discovering and developing True Human monoclonal antibodies for treating various diseases. The company's lead product is Xilonix, which is also known as MABp1, a therapeutic antibody that neutralizes interleukin-1 alpha, which has completed Phase III clinical trial in Europe for the treatment of symptomatic and advanced colorectal cancer. It has also investigating its lead product candidate in various clinical trials for other inflammatory conditions, including vascular disease, type II diabetes, acne, psoriasis, pyoderma gangrenosum, and hidradenitis suppurativa, as well as staphylococcus aureus infection, influenza, and clostridium difficile infection diseases. XBiotech, Inc. was founded in 2005 and is headquartered in Austin, Texas.

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