Contrasting Sangamo Therapeutics (NASDAQ:SGMO) and Scilex (NASDAQ:SCLX)

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

Volatility and Risk

Sangamo Therapeutics has a beta of 1.39, suggesting that its share price is 39% more volatile than the S&P 500. Comparatively, Scilex has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500.

Earnings & Valuation

This table compares Sangamo Therapeutics and Scilex’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sangamo Therapeutics	$176.23 million	0.58	-$257.83 million	($1.47)	-0.34
Scilex	$46.74 million	3.02	-$114.33 million	($1.29)	-0.66

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

Profitability

This table compares Sangamo Therapeutics and Scilex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sangamo Therapeutics	-146.30%	-82.17%	-56.21%
Scilex	-244.60%	N/A	-112.17%

Analyst Ratings

This is a summary of recent ratings and target prices for Sangamo Therapeutics and Scilex, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sangamo Therapeutics	1	3	3	0	2.29
Scilex	0	0	2	0	3.00

Sangamo Therapeutics presently has a consensus price target of $4.93, indicating a potential upside of 898.99%. Scilex has a consensus price target of $8.00, indicating a potential upside of 841.18%. Given Sangamo Therapeutics’ higher probable upside, equities analysts clearly believe Sangamo Therapeutics is more favorable than Scilex.

Insider and Institutional Ownership

56.9% of Sangamo Therapeutics shares are owned by institutional investors. Comparatively, 69.7% of Scilex shares are owned by institutional investors. 3.0% of Sangamo Therapeutics shares are owned by company insiders. Comparatively, 8.7% of Scilex shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

About Sangamo Therapeutics

Sangamo Therapeutics, Inc., a clinical-stage genomic medicine company, focuses on translating science into medicines that transform the lives of patients and families afflicted with serious diseases in the United States. The company's clinical-stage product candidates are ST-920, a gene therapy product candidate, which is in Phase 1/2 clinical study for the treatment of Fabry disease; TX200, a chimeric antigen receptor engineered regulatory T cell (CAR-Treg) therapy product candidate that is in Phase 1/2 clinical study for the prevention of immune-mediated rejection in HLA-A2 mismatched kidney transplantation; SB-525, a gene therapy product candidate, which is in Phase 3 clinical trial for the treatment of moderately severe to severe hemophilia A; BIVV003, a zinc finger nuclease gene-edited cell therapy product candidate that is in Phase 1/2 PRECIZN-1 clinical study for the treatment of sickle cell disease. Its preclinical development products focus on CAR-Treg cell therapies for autoimmune disorders and genome engineering for neurological diseases. Sangamo Therapeutics, Inc. has collaborative and strategic partnerships with Biogen MA, Inc.; Kite Pharma, Inc.; Pfizer Inc.; Sanofi S.A.; Novartis Institutes for BioMedical Research, Inc.; Shire International GmbH; Dow AgroSciences LLC; Sigma-Aldrich Corporation; Genentech, Inc.; Open Monoclonal Technology, Inc.; and California Institute for Regenerative Medicine. The company was formerly known as Sangamo BioSciences, Inc. and changed its name to Sangamo Therapeutics, Inc. in January 2017. Sangamo Therapeutics, Inc. was incorporated in 1995 and is headquartered in Richmond, California.

About Scilex

Scilex Holding Company focuses on acquiring, developing, and commercializing non-opioid pain management products for the treatment of acute and chronic pain. Its commercial products include ZTlido (lidocaine topical system) 1.8% (ZTlido), a prescription lidocaine topical product for the relief of neuropathic pain associated with postherpetic neuralgia (PHN), which is a form of post-shingles nerve pain; ELYXYB, a ready-to-use oral solution for the acute treatment of migraine with or without aura in adults; and GLOPERBA, a liquid oral version of the anti-gout medicine colchicine indicated for the prophylaxis of painful gout flares in adults. The company is also developing three product candidates, including SP-102 (10 mg dexamethasone sodium phosphate viscous gel) (SEMDEXA), a novel viscous gel formulation of a used corticosteroid for epidural injections, which has completed a Phase 3 study to treat lumbosacral radicular pain or sciatica; SP-103 (lidocaine topical system) 5.4% (SP-103), a formulation of ZTlido for the treatment of chronic neck pain and low back pain (LBP) that has completed a Phase 2 trial; and SP-104 (4.5 mg low-dose naltrexone hydrochloride delayed-release capsules) (SP-104), a novel low-dose delayed-release naltrexone hydrochloride, which has completed Phase 1 trials for the treatment of fibromyalgia. The company is headquartered in Palo Alto, California.