Critical Review: Sanofi (NASDAQ:SNY) versus Scilex (NASDAQ:SCLX)

Sanofi (NASDAQ:SNY) and Scilex (NASDAQ:SCLX) are both healthcare companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, valuation, dividends and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Sanofi and Scilex, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sanofi	1	12	7	1	2.38
Scilex	1	0	0	0	1.00

Sanofi currently has a consensus price target of $49.50, indicating a potential upside of 22.86%. Given Sanofi’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Sanofi is more favorable than Scilex.

Valuation and Earnings

This table compares Sanofi and Scilex”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sanofi	$49.35 billion	1.98	$8.84 billion	$1.91	21.09
Scilex	$31.61 million	0.76	-$358.73 million	($49.70)	-0.06

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

Volatility & Risk

Sanofi has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500. Comparatively, Scilex has a beta of 1.72, indicating that its stock price is 72% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sanofi	8.66%	14.19%	7.95%
Scilex	-1,414.57%	N/A	-147.00%

Institutional & Insider Ownership

14.0% of Sanofi shares are held by institutional investors. Comparatively, 69.7% of Scilex shares are held by institutional investors. 1.0% of Sanofi shares are held by company insiders. Comparatively, 4.5% of Scilex shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Sanofi beats Scilex on 12 of the 15 factors compared between the two stocks.

About Sanofi

Sanofi, a healthcare company, engages in the research, development, manufacture, and marketing of therapeutic solutions in the United States, Europe, Canada, and internationally. It operates through Pharmaceuticals, Vaccines, and Consumer Healthcare segments. The company provides specialty care, such as DUPIXENT, neurology and immunology, rare diseases, oncology, and rare blood disorders; medicines for diabetes and cardiovascular diseases; and established prescription products. In addition, it offers poliomyelitis, pertussis, and hib pediatric vaccines; influenza, booster, meningitis, and travel and endemic vaccines, which includes hepatitis A, typhoid, cholera, yellow fever, and rabies vaccines. The company also provides cough, cold, and flu, allergy, and pain care products, as well as physical, mental, and digestive wellness products; and offers products for itching, hydration, aging, cracking, overnight, and specialty skincare needs like eczema. Further, it has a collaboration and license agreement with Exscientia to develop up to 15 novel small-molecule for oncology and immunology; ABL Bio, Inc. to develop ABL301, a treatment for alpha-synucleinopathies; Blackstone Life Sciences to develop pivotal studies and clinical development program; and Seagen Inc. to design, develop, and commercialize antibody-drug conjugates for cancer. Additionally, the company has a collaboration agreement with IGM Biosciences, Inc. to develop, manufacture, and commercialize IgM antibody; Skyhawk Therapeutics, Inc to discover and develop novel small molecules; and Adagene Inc., for the discovery and development of antibody-based therapies. It also has collaborations with Scribe Therapeutics Inc. to develop genome editing technologies; and co-promotion service agreement with Provention Bio, Inc. for the commercialization of teplizumab. The company was formerly known as Sanofi-Aventis and changed its name to Sanofi in May 2011. Sanofi was incorporated in 1994 and is headquartered in Paris, France.

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.