Analyzing Allakos (NASDAQ:ALLK) and Acerus Pharmaceuticals (OTCMKTS:TRLPF)

Acerus Pharmaceuticals (OTCMKTS:TRLPF) and Allakos (NASDAQ:ALLK) are both small-cap medical companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Risk and Volatility

Acerus Pharmaceuticals has a beta of 2.6, suggesting that its share price is 160% more volatile than the S&P 500. Comparatively, Allakos has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500.

Profitability

This table compares Acerus Pharmaceuticals and Allakos’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Acerus Pharmaceuticals	-254.66%	-346.72%	-94.54%
Allakos	N/A	-140.87%	-86.22%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Acerus Pharmaceuticals and Allakos, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Acerus Pharmaceuticals	0	0	0	0	0.00
Allakos	0	4	1	0	2.20

Allakos has a consensus price target of $2.00, suggesting a potential upside of 687.71%. Given Allakos’ stronger consensus rating and higher probable upside, analysts clearly believe Allakos is more favorable than Acerus Pharmaceuticals.

Valuation & Earnings

This table compares Acerus Pharmaceuticals and Allakos”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Acerus Pharmaceuticals	$7.38 million	7.71	-$18.79 million	($0.08)	-2.75
Allakos	N/A	N/A	-$185.70 million	($1.32)	-0.19

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

Insider & Institutional Ownership

0.0% of Acerus Pharmaceuticals shares are owned by institutional investors. Comparatively, 84.6% of Allakos shares are owned by institutional investors. 16.1% of Allakos shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Allakos beats Acerus Pharmaceuticals on 9 of the 13 factors compared between the two stocks.

About Acerus Pharmaceuticals

Acerus Pharmaceuticals Corporation, a specialty pharmaceutical company, focuses on the development, manufacture, marketing, and distribution of pharmaceutical products for men's and women's health. The company offers Natesto, a nasal gel for testosterone replacement therapy in adult males diagnosed with hypogonadism; Estrace, an oral tablet for the symptomatic relief of menopausal symptoms; and UriVarx, a natural health product that helps reduce symptoms of hyperactive bladder, such as daytime urinary frequency, urgency, and nocturia. It also engages in developing Lidbree, a short acting lidocaine formulation delivered through a proprietary device into the vaginal mucosal tissue; Stendra, a PDE5 inhibitor for the treatment of erectile dysfunction; Elegant vaginal moisturizer, which provides comfort to women suffering from vaginal dryness; and Elegant pH, a pH balanced vaginal product; Gynoflor, an ultra-low dose vaginal estrogen combined with a probiotic for the treatment of vaginal atrophy, restoration of vaginal flora, and treatment of certain vaginal infections; and Tefina, a clinical stage product for women with female sexual dysfunction. Acerus Pharmaceuticals Corporation sells products through its salesforce in Canada; and through a network of licensed distributors in the United States and internationally. The company was formerly known as Trimel Pharmaceuticals Corporation and changed its name to Acerus Pharmaceuticals Corporation in September 2015. Acerus Pharmaceuticals Corporation was founded in 2008 and is headquartered in Mississauga, Canada.

About Allakos

Allakos Inc., a clinical stage biotechnology company, develops therapeutics that target immunomodulatory receptors present on immune effector cells in allergy, inflammatory, and proliferative diseases in the United States. The company’s lead product candidate is AK006, which in a Phase I clinical trial for the treatment of chronic spontaneous urticaria (CSU) and other indications. The company was incorporated in 2012 and is headquartered in San Carlos, California.