Critical Review: Allakos (NASDAQ:ALLK) versus Acerus Pharmaceuticals (OTCMKTS:TRLPF)

Allakos (NASDAQ:ALLK) and Acerus Pharmaceuticals (OTCMKTS:TRLPF) are both small-cap medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, valuation and institutional ownership.

Valuation & Earnings

This table compares Allakos and Acerus Pharmaceuticals”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Allakos	N/A	N/A	-$185.70 million	($1.32)	-0.20
Acerus Pharmaceuticals	$7.38 million	7.71	-$18.79 million	($0.08)	-2.75

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

Insider & Institutional Ownership

84.6% of Allakos shares are held by institutional investors. Comparatively, 0.0% of Acerus Pharmaceuticals shares are held by institutional investors. 16.1% of Allakos shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Allakos and Acerus Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Allakos	N/A	-140.87%	-86.22%
Acerus Pharmaceuticals	-254.66%	-346.72%	-94.54%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Allakos and Acerus Pharmaceuticals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Allakos	0	4	1	0	2.20
Acerus Pharmaceuticals	0	0	0	0	0.00

Allakos presently has a consensus price target of $2.00, suggesting a potential upside of 676.70%. Given Allakos’ stronger consensus rating and higher possible upside, equities analysts plainly believe Allakos is more favorable than Acerus Pharmaceuticals.

Volatility and Risk

Allakos has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500. Comparatively, Acerus Pharmaceuticals has a beta of 2.6, indicating that its share price is 160% more volatile than the S&P 500.

Summary

Allakos beats Acerus Pharmaceuticals on 9 of the 13 factors compared between the two stocks.

About Allakos

Allakos Inc., a clinical stage biotechnology company, develops therapeutics that target immunomodulatory receptors present on immune effector cells in allergy, inflammatory, and proliferative diseases in the United States. The company’s lead product candidate is AK006, which in a Phase I clinical trial for the treatment of chronic spontaneous urticaria (CSU) and other indications. The company was incorporated in 2012 and is headquartered in San Carlos, California.

About Acerus Pharmaceuticals

Acerus Pharmaceuticals Corporation, a specialty pharmaceutical company, focuses on the development, manufacture, marketing, and distribution of pharmaceutical products for men's and women's health. The company offers Natesto, a nasal gel for testosterone replacement therapy in adult males diagnosed with hypogonadism; Estrace, an oral tablet for the symptomatic relief of menopausal symptoms; and UriVarx, a natural health product that helps reduce symptoms of hyperactive bladder, such as daytime urinary frequency, urgency, and nocturia. It also engages in developing Lidbree, a short acting lidocaine formulation delivered through a proprietary device into the vaginal mucosal tissue; Stendra, a PDE5 inhibitor for the treatment of erectile dysfunction; Elegant vaginal moisturizer, which provides comfort to women suffering from vaginal dryness; and Elegant pH, a pH balanced vaginal product; Gynoflor, an ultra-low dose vaginal estrogen combined with a probiotic for the treatment of vaginal atrophy, restoration of vaginal flora, and treatment of certain vaginal infections; and Tefina, a clinical stage product for women with female sexual dysfunction. Acerus Pharmaceuticals Corporation sells products through its salesforce in Canada; and through a network of licensed distributors in the United States and internationally. The company was formerly known as Trimel Pharmaceuticals Corporation and changed its name to Acerus Pharmaceuticals Corporation in September 2015. Acerus Pharmaceuticals Corporation was founded in 2008 and is headquartered in Mississauga, Canada.