Head to Head Review: Assembly Biosciences (NASDAQ:ASMB) & DURECT (NASDAQ:DRRX)

Assembly Biosciences (NASDAQ:ASMB) and DURECT (NASDAQ:DRRX) are both small-cap medical companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, dividends, valuation and profitability.

Institutional & Insider Ownership

19.9% of Assembly Biosciences shares are held by institutional investors. Comparatively, 28.0% of DURECT shares are held by institutional investors. 5.1% of Assembly Biosciences shares are held by company insiders. Comparatively, 4.3% of DURECT shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Assembly Biosciences and DURECT”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Assembly Biosciences	$21.48 million	3.82	-$61.23 million	N/A	N/A
DURECT	$8.41 million	4.58	-$27.62 million	($0.95)	-1.31

DURECT has lower revenue, but higher earnings than Assembly Biosciences.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Assembly Biosciences and DURECT, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Assembly Biosciences	0	1	1	0	2.50
DURECT	0	2	1	0	2.33

Assembly Biosciences currently has a consensus target price of $35.00, suggesting a potential upside of 134.90%. DURECT has a consensus target price of $21.00, suggesting a potential upside of 1,593.55%. Given DURECT’s higher probable upside, analysts plainly believe DURECT is more favorable than Assembly Biosciences.

Profitability

This table compares Assembly Biosciences and DURECT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Assembly Biosciences	N/A	-121.55%	-43.06%
DURECT	-187.80%	-261.43%	-66.98%

Volatility and Risk

Assembly Biosciences has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, DURECT has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500.

Summary

Assembly Biosciences beats DURECT on 6 of the 11 factors compared between the two stocks.

About Assembly Biosciences

Assembly Biosciences, Inc., a biotechnology company, develops therapeutic candidates for the treatment of viral diseases. It develops ABI-5366, a long-acting herpes simplex virus (HSV) helicase-primase inhibitor that is in Phase 1a/1b clinical trial to treat recurrent genital herpes; ABI-1179, which is in Phase 1a/1b clinical trial for the treatment of recurrent genital herpes; and ABI-6250, a small molecule orally bioavailable hepatitis delta virus entry inhibitor that is in Phase 1a clinical trial. The company also develops ABI-4334, a next-generation capsid assembly modulator, which is in Phase 1b clinical trial for the treatment of hepatitis B virus (HBV). In addition, it develops an oral non-nucleoside polymerase inhibitor targeting transplant-related herpesviruses; and a small molecule interferon-a receptor agonist targeting HBV and HDV. The company has collaboration agreements with Gilead Sciences, Inc. and BeiGene, Ltd. The company was formerly known as Ventrus Biosciences, Inc. and changed its name to Assembly Biosciences, Inc. in June 2014. Assembly Biosciences, Inc. was incorporated in 2005 and is headquartered in South San Francisco, California.

About DURECT

DURECT Corporation, a biopharmaceutical company, develops medicines based on its epigenetic regulator program. The company's lead product larsucosterol (DUR-928), an endogenous, orally bioavailable small molecule that is in Phase IIb clinical trial to play a regulatory role in lipid metabolism, stress and inflammatory responses, and cell death and survival to treat alcohol-associated hepatitis, as well as completed Phase Ib clinical trial to treat patients with nonalcoholic steatohepatitis. It also offers ALZET product line that consists of osmotic pumps and accessories used for research in mice, rats, and other laboratory animals. In addition, the company offers POSIMIR, a post-surgical pain product to deliver bupivacaine over three days in adults; and Methydur to treat attention deficit hyperactivity disorder. It markets and sells its ALZET lines through direct sales force in the United States, as well as through a network of distributors in other countries. The company has strategic collaboration and other agreements with Virginia Commonwealth University Intellectual Property Foundation; Indivior UK Ltd.; and Innocoll Pharmaceuticals Limited. DURECT Corporation was incorporated in 1998 and is headquartered in Cupertino, California.