Scilex (NASDAQ:SCLX) and Prime Medicine (NYSE:PRME) Critical Analysis

Scilex (NASDAQ:SCLX) and Prime Medicine (NYSE:PRME) are both small-cap medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, profitability, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Risk & Volatility

Scilex has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500. Comparatively, Prime Medicine has a beta of 2.18, suggesting that its share price is 118% more volatile than the S&P 500.

Valuation and Earnings

This table compares Scilex and Prime Medicine”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Scilex	$50.83 million	3.56	-$114.33 million	($1.31)	-0.76
Prime Medicine	$591,000.00	777.87	-$198.13 million	($2.17)	-1.76

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

Profitability

This table compares Scilex and Prime Medicine’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Scilex	-233.88%	N/A	-111.82%
Prime Medicine	N/A	-106.30%	-81.24%

Institutional and Insider Ownership

69.7% of Scilex shares are owned by institutional investors. Comparatively, 70.4% of Prime Medicine shares are owned by institutional investors. 8.7% of Scilex shares are owned by insiders. Comparatively, 24.3% of Prime Medicine shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Scilex	0	0	3	0	3.00
Prime Medicine	0	1	9	0	2.90

Scilex presently has a consensus target price of $8.00, indicating a potential upside of 700.00%. Prime Medicine has a consensus target price of $14.11, indicating a potential upside of 268.44%. Given Scilex’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Scilex is more favorable than Prime Medicine.

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.

About Prime Medicine

Prime Medicine, Inc., a biotechnology company, delivers genetic therapies to address the spectrum of diseases by deploying gene editing technology. The company offers Prime Editors with a Prime Editor protein, comprising a fusion between a Cas protein and a reverse transcriptase enzyme; and a pegRNA, which targets the Prime Editor to a specific genomic location and provides a template for making the desired edit to the target DNA sequence. It has a research collaboration with Cimeio Therapeutics to develop Prime Edited Shielded-Cell & Immunotherapy Pairs for genetic diseases, acute myeloid leukemia, and myelodysplastic syndrome. The company was incorporated in 2019 and is based in Cambridge, Massachusetts.