Critical Survey: Five Prime Therapeutics (FPRX) versus NewLink Genetics (NLNK)

Five Prime Therapeutics (NASDAQ:FPRX) and NewLink Genetics (NASDAQ:NLNK) are both small-cap medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, valuation, institutional ownership and earnings.

Insider and Institutional Ownership

86.3% of Five Prime Therapeutics shares are held by institutional investors. Comparatively, 42.0% of NewLink Genetics shares are held by institutional investors. 6.4% of Five Prime Therapeutics shares are held by company insiders. Comparatively, 12.3% of NewLink Genetics shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Five Prime Therapeutics has a beta of 3.25, indicating that its share price is 225% more volatile than the S&P 500. Comparatively, NewLink Genetics has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500.

Profitability

This table compares Five Prime Therapeutics and NewLink Genetics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Five Prime Therapeutics -206.02% -40.61% -33.08%
NewLink Genetics -252.18% -53.70% -44.16%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Five Prime Therapeutics and NewLink Genetics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Five Prime Therapeutics 0 4 6 0 2.60
NewLink Genetics 0 6 0 0 2.00

Five Prime Therapeutics presently has a consensus target price of $32.89, indicating a potential upside of 130.96%. NewLink Genetics has a consensus target price of $10.67, indicating a potential upside of 396.12%. Given NewLink Genetics’ higher probable upside, analysts clearly believe NewLink Genetics is more favorable than Five Prime Therapeutics.

Valuation & Earnings

This table compares Five Prime Therapeutics and NewLink Genetics’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Five Prime Therapeutics $39.51 million 12.82 -$150.22 million ($5.38) -2.65
NewLink Genetics $28.71 million 2.79 -$71.95 million ($2.30) -0.93

NewLink Genetics has lower revenue, but higher earnings than Five Prime Therapeutics. Five Prime Therapeutics is trading at a lower price-to-earnings ratio than NewLink Genetics, indicating that it is currently the more affordable of the two stocks.

Summary

Five Prime Therapeutics beats NewLink Genetics on 9 of the 14 factors compared between the two stocks.

Five Prime Therapeutics Company Profile

Five Prime Therapeutics, Inc., a clinical-stage biotechnology company, focuses on the discovery and development of immuno-oncology protein therapeutics. The company's product candidates include Cabiralizumab, an antibody that inhibits colony stimulating factor-1 receptor that is in Phase Ia/Ib clinical trials for the treatment of various cancers in combination with nivolumab; and is in Phase I/II clinical trials for the treatment of pigmented villonodular synovitis tumor. Its product candidates also comprise Bemarituzumab, an antibody that inhibits fibroblast growth factor receptor IIb, which is in Phase I clinical trials to treat patients with gastric or gastroesophageal junction and bladder cancer; and FPA150, a CD8 T cell checkpoint inhibitor antibody that targets B7-H4 as a monotherapy in various cancers. The company's FP-1039 is in Phase Ib clinical trials to treat patients with malignant pleural mesothelioma. Its preclinical product candidates include FPA150, a CD8 T cell checkpoint inhibitor antibody; FPA154, a tetravalent agonistic antibody that activates glucocorticoid-induced tumor necrosis factor receptor; and FPT155, a CD80-Fc fusion protein, which modulates signaling pathways. The company has license and collaboration agreements with Bristol-Myers Squibb Company, GlaxoSmithKline LLC, INBRX 110 LP, UCB Pharma S.A., and Zai Lab (Shanghai) Co., Ltd.; collaboration agreement with Roche; and license agreements with bluebird bio, Inc., Galaxy Biotech, LLC, BioWa, Inc. and Lonza Sales AG. Five Prime Therapeutics, Inc. was founded in 2001 and is headquartered in South San Francisco, California.

NewLink Genetics Company Profile

NewLink Genetics Corporation, a late clinical-stage immuno-oncology company, focuses on discovering and developing novel immunotherapeutic products for the treatment of patients with cancer. It is developing NLG2103, a combination of indoximod and standard of care checkpoint inhibitors, which is in Phase II clinical trial for treating patients with advanced melanoma; and Indigo301, a combination of indoximod with a checkpoint inhibitor that is in Phase III clinical trial for treating patients with advanced unresectable or metastatic melanoma, as well as combination of indoximod with other cancer therapeutics for patients with melanoma, pancreatic cancer, pediatric brain tumors, and acute myeloid leukemia. The company is also developing NLG802, a prodrug of indoximod, which has completed Phase I clinical trial; and NLG919, a clinical stage indoleamine-2, 3-dioxygenase pathway inhibitor. In addition, it is developing tergenpumatucel-L and dorgenmeltucel-L that are in Phase II clinical trials for treating patients with advanced lung cancer and melanoma; and CRLX101 and CRLX301, which are in early clinical development to treat patients with advanced solid malignancies. The company has strategic collaboration agreement with AstraZeneca to evaluate the combination of indoximod and durvalumab, an anti-PD-L1 monoclonal antibody for treating patients with metastatic pancreatic cancer; Genentech Inc. for the development and commercialization of NLG919, as well as a research collaboration for the discovery of next generation IDO/TDO inhibitors; and Merck Sharpe and Dohme Corp. to research, develop, and commercialize rVSV G-ZEBOV GP, an Ebola vaccine product candidate. NewLink Genetics Corporation was founded in 1999 and is headquartered in Ames, Iowa.

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