Par Pharmaceutical Companies (PRX) & Depomed (DEPO) Critical Analysis

Par Pharmaceutical Companies (NYSE: PRX) and Depomed (NASDAQ:DEPO) are both healthcare companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Valuation and Earnings

This table compares Par Pharmaceutical Companies and Depomed’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Par Pharmaceutical Companies N/A N/A N/A $2.04 N/A
Depomed $455.90 million 1.17 -$88.72 million ($1.83) -4.62

Par Pharmaceutical Companies has higher earnings, but lower revenue than Depomed. Depomed is trading at a lower price-to-earnings ratio than Par Pharmaceutical Companies, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Par Pharmaceutical Companies and Depomed’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Par Pharmaceutical Companies N/A N/A N/A
Depomed -27.73% -51.07% -10.00%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Par Pharmaceutical Companies and Depomed, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Par Pharmaceutical Companies 0 0 0 0 N/A
Depomed 0 5 3 0 2.38

Depomed has a consensus price target of $11.75, suggesting a potential upside of 38.89%.

Institutional and Insider Ownership

91.0% of Depomed shares are held by institutional investors. 2.6% of Depomed shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Par Pharmaceutical Companies Company Profile

Par Pharmaceutical Companies, Inc. is a holding company that, principally through its wholly owned operating subsidiary, Par Pharmaceutical, Inc., is in the business of developing, licensing, manufacturing, marketing and distributing generic and branded drugs in the United States. The Company operates primarily in the United States as two business segments: Par Pharmaceutical (Par), its generic products division, and Strativa Pharmaceuticals (Strativa), its branded products division. In February 17, 2012, the Company acquired Edict Pharmaceuticals Private Limited. On November 17, 2011, it acquired Anchen Incorporated and its subsidiary, Anchen Pharmaceuticals, Inc. In October 2011, it acquired rights to three products from Teva Pharmaceuticals in connection with Teva’s acquisition of Cephalon. In September 2012, certain affiliates of TPG acquired the Company.

Depomed Company Profile

Depomed, Inc. is a specialty pharmaceutical company. The Company focuses on pain and other central nervous system (CNS) conditions. Its products include NUCYNTA ER (tapentadol extended release tablets), NUCYNTA IR (NUCYNTA) (tapentadol), Gralise (gabapentin), CAMBIA (diclofenac potassium for oral solution), Zipsor (diclofenac potassium) and Lazanda (fentanyl). Its NUCYNTA ER (tapentadol extended release tablets) is a product for the management of pain severe enough to require daily long term opioid treatment, including neuropathic pain associated with diabetic peripheral neuropathy in adults, and its NUCYNTA (tapentadol) is a product for the management of moderate to severe acute pain in adults. Its Gralise (gabapentin) is a once-daily product for the management of postherpetic neuralgia. Its CAMBIA (diclofenac potassium for oral solution) is a product for the acute treatment of migraine attacks.

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