Head-To-Head Analysis: Lion Biotechnologies (NASDAQ:IOVA) and Veracyte (VCYT)

Lion Biotechnologies (NASDAQ: IOVA) and Veracyte (NASDAQ:VCYT) are both small-cap medical companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitabiliy, earnings and valuation.

Insider and Institutional Ownership

77.8% of Lion Biotechnologies shares are owned by institutional investors. Comparatively, 63.4% of Veracyte shares are owned by institutional investors. 13.2% of Lion Biotechnologies shares are owned by company insiders. Comparatively, 13.4% of Veracyte 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.

Earnings & Valuation

This table compares Lion Biotechnologies and Veracyte’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Lion Biotechnologies N/A N/A N/A ($2.10) -2.62
Veracyte $71.70 million 3.81 -$20.10 million ($0.80) -10.06

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

Volatility and Risk

Lion Biotechnologies has a beta of 4.43, indicating that its stock price is 343% more volatile than the S&P 500. Comparatively, Veracyte has a beta of 1.91, indicating that its stock price is 91% more volatile than the S&P 500.

Profitability

This table compares Lion Biotechnologies and Veracyte’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lion Biotechnologies N/A -18.59% -17.95%
Veracyte -35.64% -53.58% -29.07%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Lion Biotechnologies and Veracyte, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lion Biotechnologies 0 0 9 0 3.00
Veracyte 0 0 5 0 3.00

Lion Biotechnologies presently has a consensus target price of $14.86, suggesting a potential upside of 170.13%. Veracyte has a consensus target price of $13.00, suggesting a potential upside of 61.49%. Given Lion Biotechnologies’ higher possible upside, equities research analysts clearly believe Lion Biotechnologies is more favorable than Veracyte.

Summary

Lion Biotechnologies beats Veracyte on 7 of the 10 factors compared between the two stocks.

About Lion Biotechnologies

Iovance Biotherapeutics, Inc., formerly Lion Biotechnologies, Inc., is a clinical-stage biopharmaceutical company. The Company is focused on the development and commercialization of cancer immunotherapy products designed to harness the power of a patient’s own immune system to eradicate cancer cells. The Company’s lead program is an adoptive cell therapy utilizing tumor-infiltrating lymphocytes, which are T cells derived from patients’ tumors, for the treatment of metastatic melanoma. As of December 31, 2016, it had an on-going Phase II clinical trial of its lead product candidate, LN-144, TIL for the treatment of metastatic melanoma. The Company is developing LN-145 to treat cervical and head and neck cancers. It is collaborating with the National Cancer Institute to evaluate unmodified TIL in other solid tumor indications, such as ocular melanoma, bladder, breast and lung cancer. It is collaborating with the NCI to evaluate TIL in combination with the checkpoint inhibitor, Keytruda.

About Veracyte

Veracyte, Inc. is a genomic diagnostics company. The Company uses genomic technology to resolve diagnostic ambiguity. It targets diseases in which patients undergo invasive diagnostic procedures. Its products combine genomic technology, clinical science and machine learning. The Company commercializes over three genomic tests, which are transforming the diagnosis of thyroid cancer, lung cancer and idiopathic pulmonary fibrosis. The Company’s commercial solution, the Afirma Thyroid fine needle aspiration (FNA) Analysis, centers on the Afirma Gene Expression Classifier (GEC). The Afirma GEC is offered directly or as part of a solution that also includes cytopathology. The Company operates in the pulmonology diagnostics market. It offers Percepta Bronchial Genomic Classifier, a genomic test to resolve ambiguity in lung cancer diagnosis. It also offers the Envisia Genomic Classifier, which is designed to help in the assessment of patients suspected to have idiopathic pulmonary fibrosis.

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