Critical Review: AMAG Pharmaceuticals (AMAG) versus Five Prime Therapeutics (FPRX)

AMAG Pharmaceuticals (NASDAQ:AMAG) and Five Prime Therapeutics (NASDAQ:FPRX) are both small-cap medical companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Risk and Volatility

AMAG Pharmaceuticals has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500. Comparatively, Five Prime Therapeutics has a beta of 3.03, suggesting that its stock price is 203% more volatile than the S&P 500.

Insider and Institutional Ownership

85.7% of Five Prime Therapeutics shares are owned by institutional investors. 4.9% of AMAG Pharmaceuticals shares are owned by insiders. Comparatively, 6.4% of Five Prime Therapeutics shares are owned by 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.

Profitability

This table compares AMAG Pharmaceuticals and Five Prime Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AMAG Pharmaceuticals -30.90% -26.33% -14.19%
Five Prime Therapeutics -683.89% -54.87% -44.40%

Earnings & Valuation

This table compares AMAG Pharmaceuticals and Five Prime Therapeutics’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AMAG Pharmaceuticals $474.00 million 0.74 -$65.76 million ($3.88) -2.66
Five Prime Therapeutics $49.87 million 6.66 -$140.45 million ($4.13) -2.23

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for AMAG Pharmaceuticals and Five Prime Therapeutics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AMAG Pharmaceuticals 1 7 1 0 2.00
Five Prime Therapeutics 0 2 6 0 2.75

AMAG Pharmaceuticals currently has a consensus target price of $19.41, indicating a potential upside of 87.67%. Five Prime Therapeutics has a consensus target price of $27.00, indicating a potential upside of 193.16%. Given Five Prime Therapeutics’ stronger consensus rating and higher possible upside, analysts plainly believe Five Prime Therapeutics is more favorable than AMAG Pharmaceuticals.

Summary

Five Prime Therapeutics beats AMAG Pharmaceuticals on 8 of the 14 factors compared between the two stocks.

About AMAG Pharmaceuticals

AMAG Pharmaceuticals, Inc., a biopharmaceutical company, develops, manufactures, and commercializes therapeutics for maternal and women's health, anemia management, and cancer supportive care in the United States. It markets Feraheme (ferumoxytol), an intravenous iron replacement therapeutic agent for the treatment of iron deficiency anemia in adult patients who have intolerance to oral iron or have had unsatisfactory response to oral iron, as well as patients who have chronic kidney disease; Makena, a hydroxyprogesterone caproate injection to reduce the risk of preterm birth in women pregnant with a single baby who have a history of singleton spontaneous preterm birth; Intrarosa(prasterone) vaginal insert steroid for the treatment of dyspareunia due to menopause; and MuGard Mucoadhesive Oral Wound Rinse for the management of oral mucocitis/stomatiits and various types of oral wounds. The company's products candidates include Vyleesi (bremelanotide), an auto-injector device for the treatment of hypoactive sexual desire disorder in pre-menopausal women; AMAG-423, a polyclonal antibody in development for the treatment of severe preeclampsia in pregnant women; and Ciraparantag, an anticoagulant reversal agent for the treatment of oral anticoagulants or low molecular weight heparin. It sells Feraheme to authorized wholesalers and specialty distributors. The company has a license agreement with Endoceutics, Inc., Palatin Technologies, Inc., Velo Bio LLC, Perosphere Pharmaceuticals Inc., Antares Pharma, Inc., and Abeona Therapeutics, Inc. AMAG Pharmaceuticals, Inc. was founded in 1981 and is headquartered in Waltham, Massachusetts.

About Five Prime Therapeutics

Five Prime Therapeutics, Inc., a clinical-stage biotechnology company, focuses on the discovery and development of innovative protein therapeutics. The company's product candidates comprise Bemarituzumab, an antibody that inhibits fibroblast growth factor receptor 2b, or FGFR2b, which is in Phase III clinical trials to treat patients with gastric or gastroesophageal junction and GEJ cancer; and FPA150, a CD8 T cell checkpoint inhibitor antibody that targets B7-H4 in various cancers, as well as FPT155, a soluble CD80 fusion protein that enhances co-stimulation of T cells through CD28. Its product candidates also include Cabiralizumab, an antibody that inhibits colony stimulating factor-1 receptor that is in Phase Ia/Ib clinical trials for the treatment of various cancers in combination with nivolumab; and is in Phase I/II clinical trials for the treatment of pigmented villonodular synovitis tumor. The company's BMS-986258, an anti-T cell immunoglobulin and mucin domain-3 antibody, which is in clinical trial as a single agent and in combination with Opdivo in patients with advanced malignant tumors. It has license and collaboration agreements with Bristol-Myers Squibb Company, GlaxoSmithKline LLC, INBRX 110 LP, UCB Pharma S.A., and Zai Lab (Shanghai) Co., Ltd.; a collaboration agreement with Roche; and license agreements with Galaxy Biotech, LLC, BioWa, Inc. and Lonza Sales AG. The company was founded in 2001 and is headquartered in South San Francisco, California.

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