InMed Pharmaceuticals (NASDAQ:INM – Get Free Report) and Heron Therapeutics (NASDAQ:HRTX – Get Free Report) are both small-cap healthcare companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.
Volatility & Risk
InMed Pharmaceuticals has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500. Comparatively, Heron Therapeutics has a beta of 1.62, indicating that its stock price is 62% more volatile than the S&P 500.
Institutional and Insider Ownership
20.1% of InMed Pharmaceuticals shares are held by institutional investors. Comparatively, 80.0% of Heron Therapeutics shares are held by institutional investors. 0.9% of InMed Pharmaceuticals shares are held by insiders. Comparatively, 6.1% of Heron Therapeutics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Earnings & Valuation
This table compares InMed Pharmaceuticals and Heron Therapeutics”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| InMed Pharmaceuticals | $4.94 million | 0.90 | -$12.56 million | ($1.64) | -0.82 |
| Heron Therapeutics | $154.90 million | 0.43 | -$20.19 million | ($0.19) | -1.87 |
InMed Pharmaceuticals has higher earnings, but lower revenue than Heron Therapeutics. Heron Therapeutics is trading at a lower price-to-earnings ratio than InMed Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares InMed Pharmaceuticals and Heron Therapeutics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| InMed Pharmaceuticals | N/A | -156.08% | -123.90% |
| Heron Therapeutics | -22.52% | -293.02% | -10.00% |
Analyst Ratings
This is a summary of recent recommendations and price targets for InMed Pharmaceuticals and Heron Therapeutics, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| InMed Pharmaceuticals | 1 | 0 | 0 | 0 | 1.00 |
| Heron Therapeutics | 1 | 3 | 1 | 0 | 2.00 |
Heron Therapeutics has a consensus price target of $2.00, indicating a potential upside of 464.17%. Given Heron Therapeutics’ stronger consensus rating and higher possible upside, analysts clearly believe Heron Therapeutics is more favorable than InMed Pharmaceuticals.
Summary
Heron Therapeutics beats InMed Pharmaceuticals on 9 of the 14 factors compared between the two stocks.
About InMed Pharmaceuticals
InMed Pharmaceuticals Inc., a clinical stage pharmaceutical company, develops a pipeline of prescription-based products. The company operates through two segments, the InMed and the BayMedica. The InMed segment researches and develops cannabinoid-based pharmaceuticals products. The BayMedica segment develops proprietary manufacturing technologies to produce and sell rare cannabinoids for the health and wellness industry. Its prescription-based products include rare cannabinoids and novel cannabinoid analogs for the treatment of diseases with high unmet medical needs. The company’s lead product is INM-755, a cannabinol topical skin cream, completed Phase 2 clinical trial for the treatment of epidermolysis bullosa. It also develops INM-088, which is in preclinical studies for the treatment of glaucoma; and INM-900 for neurodegenerative diseases. In addition, the company offers IntegraSyn, an integrated biosynthesis-based manufacturing approach, for pharmaceutical-grade cannabinoids; and cannabichromene, cannabicitran, cannabidivarin, and tetrahydrocannabivarin. The company was formerly known as Cannabis Technologies Inc. and changed its name to InMed Pharmaceuticals Inc. in October 2014. InMed Pharmaceuticals Inc. was incorporated in 1981 and is headquartered in Vancouver, Canada.
About Heron Therapeutics
Heron Therapeutics, Inc., a commercial-stage biotechnology company, focuses on enhancing the lives of patients by developing and commercializing therapeutic that enhances medical care. The company's product candidates utilize its proprietary Biochronomer, a drug delivery technology, which delivers therapeutic levels of a range of short-acting pharmacological agents over a period from days to weeks with a single administration. It offers SUSTOL (granisetron), an extended-release injection for the prevention of acute and delayed nausea and vomiting associated with moderately emetogenic chemotherapy, or anthracycline and cyclophosphamide combination chemotherapy regimens; and CINVANTI, an intravenous formulation of aprepitant, a substance P/neurokinin-1 receptor antagonist for the prevention of acute and delayed nausea and vomiting associated with highly emetogenic cancer chemotherapy, as well as nausea and vomiting associated with moderately emetogenic cancer chemotherapy. The company is also developing ZYNRELEF, a dual-acting local anesthetic that delivers a fixed-dose combination of the local anesthetic bupivacaine and a low dose of the nonsteroidal anti-inflammatory drug meloxicam; and APONVIE, an intravenous formulation of a substance P/neurokinin-1 receptor antagonist indicated for the prevention of postoperative nausea and vomiting in adults. The company was formerly known as A.P. Pharma, Inc. and changed its name to Heron Therapeutics, Inc. in January 2014. Heron Therapeutics, Inc. was founded in 1983 and is headquartered in San Diego, California.
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