Reviewing Scilex (NASDAQ:SCLX) & Enanta Pharmaceuticals (NASDAQ:ENTA)

Enanta Pharmaceuticals (NASDAQ:ENTA) and Scilex (NASDAQ:SCLX) are both small-cap healthcare companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, earnings, dividends and risk.

Profitability

This table compares Enanta Pharmaceuticals and Scilex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Enanta Pharmaceuticals	-96.89%	-61.84%	-20.70%
Scilex	-1,414.57%	N/A	-147.00%

Earnings and Valuation

This table compares Enanta Pharmaceuticals and Scilex”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enanta Pharmaceuticals	$65.32 million	5.39	-$81.89 million	($2.41)	-5.02
Scilex	$30.25 million	0.83	-$358.73 million	($49.70)	-0.06

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

Insider & Institutional Ownership

95.0% of Enanta Pharmaceuticals shares are owned by institutional investors. Comparatively, 69.7% of Scilex shares are owned by institutional investors. 11.5% of Enanta Pharmaceuticals shares are owned by insiders. Comparatively, 4.5% of Scilex shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Enanta Pharmaceuticals and Scilex, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enanta Pharmaceuticals	1	0	3	0	2.50
Scilex	1	0	0	0	1.00

Enanta Pharmaceuticals currently has a consensus target price of $19.00, indicating a potential upside of 57.02%. Given Enanta Pharmaceuticals’ stronger consensus rating and higher possible upside, research analysts plainly believe Enanta Pharmaceuticals is more favorable than Scilex.

Volatility & Risk

Enanta Pharmaceuticals has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500. Comparatively, Scilex has a beta of 1.72, indicating that its share price is 72% more volatile than the S&P 500.

Summary

Enanta Pharmaceuticals beats Scilex on 11 of the 14 factors compared between the two stocks.

About Enanta Pharmaceuticals

Enanta Pharmaceuticals, Inc., a biotechnology company, discovers and develops small molecule drugs for the treatment of viral infections and liver diseases. Its product pipeline comprises EDP-514, which is in phase 1b clinical development for the treatment of chronic infection with hepatitis B virus or HBV; EDP-938 and EDP-323, which is in phase II clinical development for the treatment of respiratory syncytial virus; EDP-235, which is in phase II clinical development for the treatment of human coronaviruses; and Glecaprevir, which is in the market for the treatment of chronic infection with hepatitis C virus or HCV. The company has a collaborative development and license agreement with Abbott Laboratories to develop, manufacture, and commercialize HCV NS3 and NS3/4A protease inhibitor compounds, including paritaprevir and glecaprevir. Enanta Pharmaceuticals, Inc. was incorporated in 1995 and is headquartered in Watertown, Massachusetts.

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.