Critical Survey: Ultragenyx Pharmaceutical (RARE) vs. Depomed (DEPO)

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Ultragenyx Pharmaceutical (NASDAQ: DEPO) and Depomed (NASDAQ:DEPO) are both medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, valuation, earnings, analyst recommendations, risk and institutional ownership.

Earnings and Valuation

This table compares Ultragenyx Pharmaceutical and Depomed’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ultragenyx Pharmaceutical $2.61 million 1,516.94 -$302.13 million ($7.50) -10.52
Depomed $380.72 million 1.23 -$102.49 million ($1.26) -5.79

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

Institutional & Insider Ownership

94.1% of Ultragenyx Pharmaceutical shares are owned by institutional investors. Comparatively, 98.9% of Depomed shares are owned by institutional investors. 8.4% of Ultragenyx Pharmaceutical shares are owned by insiders. Comparatively, 2.3% of Depomed shares are owned by 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 Ultragenyx Pharmaceutical and Depomed, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ultragenyx Pharmaceutical 0 4 15 0 2.79
Depomed 0 4 3 0 2.43

Ultragenyx Pharmaceutical presently has a consensus target price of $79.00, indicating a potential upside of 0.13%. Depomed has a consensus target price of $8.67, indicating a potential upside of 18.72%. Given Depomed’s higher possible upside, analysts plainly believe Depomed is more favorable than Ultragenyx Pharmaceutical.

Volatility & Risk

Ultragenyx Pharmaceutical has a beta of 1.93, suggesting that its share price is 93% more volatile than the S&P 500. Comparatively, Depomed has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500.

Profitability

This table compares Ultragenyx Pharmaceutical and Depomed’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ultragenyx Pharmaceutical -703.27% -44.09% -37.65%
Depomed -9.52% -13.22% -2.52%

Summary

Depomed beats Ultragenyx Pharmaceutical on 8 of the 13 factors compared between the two stocks.

About Ultragenyx Pharmaceutical

Ultragenyx Pharmaceutical Inc., a biopharmaceutical company, focuses on the identification, acquisition, development, and commercialization of various products for the treatment of rare and ultra-rare genetic diseases in the United States. Its biologics product candidate includes Mepsevii, an enzyme replacement therapy for the treatment of children and adults with Mucopolysaccharidosis VII. The company is developing various biologics product candidates, including Burosumab, a human monoclonal antibody that is in Phase III study to bind and reduce the biological activity of fibroblast growth factor 23 to enhance abnormally low phosphate levels in patients with X-linked hypophosphatemia, as well as for the treatment of tumor-induced osteomalacia. It is also developing a range of small-molecule product candidates, such as UX007, a substrate replacement therapy that completed Phase II study for patients with fatty acid oxidation disorders, as well as for patients with glucose transporter type-1 deficiency syndrome. In addition, the company is developing adeno-associated virus 8 (AAV8) gene therapy products comprising DTX301, an AAV8 for the treatment of OTC deficiency; DTX401, an AAV8 gene therapy program for the treatment of patients with GSDIa; and DTX201, a FVIII gene therapy program for the treatment of hemophilia A. It has a collaboration agreement with Rentschler Fill Solutions GmbH. Ultragenyx Pharmaceutical Inc. was founded in 2010 and is headquartered in Novato, California.

About Depomed

Depomed, Inc., a specialty pharmaceutical company, engages in the development, sale, and licensing of products for pain and other central nervous system conditions in the United States. It offers Gralise (gabapentin), an once-daily product for the management of postherpetic neuralgia; CAMBIA (diclofenac potassium for oral solution), a non-steroidal anti-inflammatory drug indicated for acute treatment of migraine attacks in adults; and Zipsor (diclofenac potassium) liquid filled capsule, a non-steroidal anti-inflammatory drug for the treatment of mild to moderate acute pain in adults. The company also provides NUCYNTA ER (tapentadol extended release tablet), a product for the management of pain severe enough to long term opioid treatment, including neuropathic pain associated with diabetic peripheral neuropathy (DPN) in adults; and NUCYNTA IR (tapentadol), a product for the management of moderate to severe acute pain in adults. In addition, it is involved in the clinical development of Cebranopadol for the treatment of chronic nociceptive and neuropathic pain. Depomed, Inc. has a collaboration and license agreement with Ironwood Pharmaceuticals, Inc.; and a license agreement with Janssen Pharmaceuticals, Inc. based on its proprietary Acuform gastroretentive drug delivery technology. The company sells its products to wholesalers and retail pharmacies. Depomed, Inc. was founded in 1995 and is headquartered in Newark, California.

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