Mereo BioPharma Group (NASDAQ:MREO – Get Free Report) and Spero Therapeutics (NASDAQ:SPRO – Get Free Report) are both small-cap medical companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, earnings, profitability, dividends, valuation and analyst recommendations.
Institutional & Insider Ownership
62.8% of Mereo BioPharma Group shares are held by institutional investors. Comparatively, 25.6% of Spero Therapeutics shares are held by institutional investors. 5.5% of Mereo BioPharma Group shares are held by company insiders. Comparatively, 5.5% of Spero Therapeutics shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Analyst Ratings
This is a summary of current recommendations and price targets for Mereo BioPharma Group and Spero Therapeutics, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Mereo BioPharma Group | 1 | 4 | 3 | 0 | 2.25 |
| Spero Therapeutics | 1 | 1 | 0 | 0 | 1.50 |
Profitability
This table compares Mereo BioPharma Group and Spero Therapeutics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Mereo BioPharma Group | N/A | -83.02% | -72.68% |
| Spero Therapeutics | -108.11% | -125.91% | -57.58% |
Valuation & Earnings
This table compares Mereo BioPharma Group and Spero Therapeutics”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Mereo BioPharma Group | $500,000.00 | 113.62 | -$41.88 million | ($0.06) | -5.95 |
| Spero Therapeutics | $47.98 million | 2.87 | -$68.57 million | ($0.79) | -3.09 |
Mereo BioPharma Group has higher earnings, but lower revenue than Spero Therapeutics. Mereo BioPharma Group is trading at a lower price-to-earnings ratio than Spero Therapeutics, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Mereo BioPharma Group has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500. Comparatively, Spero Therapeutics has a beta of 1.45, indicating that its stock price is 45% more volatile than the S&P 500.
Summary
Mereo BioPharma Group beats Spero Therapeutics on 9 of the 13 factors compared between the two stocks.
About Mereo BioPharma Group
Mereo BioPharma Group plc, a biopharmaceutical company, develops and commercializes therapeutics for the treatment of oncology and rare diseases in the United Kingdom, the United States, and internationally. It develops Etigilimab (MPH-313), an antibody T-cell immunoreceptor with Ig and ITIM domains, which is in Phase 1b clinical trial for the treatment of tumors. The company is also developing Navicixizumab (OMP-305B83), which has completed Phase 1b clinical trials for the treatment of the late line ovarian cancer; Acumapimod (BCT-197), a p38 MAP kinase inhibitor that is in Phase II clinical trials to treat acute exacerbations of chronic obstructive pulmonary disease; and Leflutrozole (BGS-649), an oral aromatase inhibitor for the treatment of hypogonadotropic hypogonadism which is in Phase 2 trials. In addition, it develops rare disease product candidates, including Setrusumab (BPS-804), an antibody for the treatment of osteogenesis imperfecta; and Alvelestat (MPH-966), an oral small molecule that is in Phase II clinical trial to treat Alpha-1 anti-trypsin deficiency. The company has a license agreement with Feng Biosciences for the development and commercialization of navicixizumab; license agreement with ReproNovo for the development and commercialization of leflutrozole; licensing agreement with AstraZeneca; and license agreement with Ultragenyx Pharmaceutical Inc. to develop and commercialize setrusumab. Mereo BioPharma Group plc was incorporated in 2015 and is headquartered in London, the United Kingdom.
About Spero Therapeutics
Spero Therapeutics, Inc., a clinical-stage biopharmaceutical company, focuses on identifying, developing, and commercializing novel treatments for multi-drug resistant (MDR) bacterial infections and rare diseases in the United States. The company’s product candidates include tebipenem pivoxil hydrobromide (HBr), an oral carbapenem-class antibiotic to treat complicated urinary tract infections, including pyelonephritis for adults; SPR206, an intravenous-administered antibiotic against MDR Gram-negative pathogens comprising carbapenem-resistant enterobacterales (CRE), acinetobacter baumannii, and pseudomonas aeruginosa, as well as negative bacterial infections in the hospital setting; and SPR720, a novel oral antibiotic agent for the treatment of non-tuberculous mycobacterial pulmonary disease. It has license agreement with Meiji Seika Pharma Co., Ltd. to support the development of tebipenem HBr; Everest Medicines to develop, manufacture, and commercialize SPR206 in Greater China, South Korea, and Southeast Asian countries; and Vertex Pharmaceuticals Incorporated for patents relating to SPR720, as well as SPR719, an active metabolite. Spero Therapeutics, Inc. was founded in 2013 and is headquartered in Cambridge, Massachusetts.
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