Critical Review: Novogen (NASDAQ:KZIA) & Opthea (NASDAQ:OPT)

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

Analyst Ratings

This is a breakdown of current ratings and price targets for Opthea and Novogen, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Opthea	2	4	0	0	1.67
Novogen	1	0	2	0	2.33

Opthea currently has a consensus target price of $1.33, suggesting a potential downside of 60.90%. Novogen has a consensus target price of $19.00, suggesting a potential upside of 133.70%. Given Novogen’s stronger consensus rating and higher possible upside, analysts clearly believe Novogen is more favorable than Opthea.

Profitability

This table compares Opthea and Novogen’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Opthea	N/A	N/A	N/A
Novogen	N/A	N/A	N/A

Volatility and Risk

Opthea has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500. Comparatively, Novogen has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500.

Valuation and Earnings

This table compares Opthea and Novogen”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Opthea	$25,000.00	20,993.46	-$162.79 million	N/A	N/A
Novogen	$30,000.00	447.15	-$13.41 million	N/A	N/A

Novogen has higher revenue and earnings than Opthea.

Institutional & Insider Ownership

56.0% of Opthea shares are owned by institutional investors. Comparatively, 30.9% of Novogen shares are owned by institutional investors. 3.2% of Opthea shares are owned by company insiders. Comparatively, 1.0% of Novogen shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Novogen beats Opthea on 6 of the 9 factors compared between the two stocks.

About Opthea

Opthea Limited, a clinical stage biopharmaceutical company, engages in the development and commercialization of therapies primarily for eye disease in Australia. The company's development activities are based on the intellectual property portfolio covering Vascular Endothelial Growth Factors (VEGF) VEGF-C, VEGF-D, and VEGF Receptor-3 for the treatment of diseases associated with blood and lymphatic vessel growth, as well as vascular leakage. Its lead product candidate is Sozinibercept (OPT 302), a soluble form of vascular endothelial growth factor receptor-3 VEGFR-3, currently under Phase 3 clinical development as a novel therapy for wet age-related macular degeneration and diabetic macular edema. The company was formerly known as Circadian Technologies Limited and changed its name to Opthea Limited in December 2015. Opthea Limited was incorporated in 1984 and is based in South Yarra, Australia.

About Novogen

Kazia Therapeutics Limited operates as an oncology-focused biotechnology company. The company’s lead development candidate is Paxalisib, a small molecule, brain-penetrant inhibitor of the PI3K/AKT/mTOR pathway, which is developed as a potential therapy for glioblastoma. It also develops EVT801, a small-molecule selective inhibitor of vascular endothelial growth factor receptor 3. The company was formerly known as Novogen Limited and changed its name to Kazia Therapeutics Limited in November 2017. Kazia Therapeutics Limited was incorporated in 1994 and is based in Sydney, Australia.