PaxMedica (NASDAQ:PXMD) and Merck & Co., Inc. (NYSE:MRK) Financial Contrast

Merck & Co., Inc. (NYSE:MRK) and PaxMedica (NASDAQ:PXMD) are both healthcare companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, risk, analyst recommendations, institutional ownership, valuation and earnings.

Profitability

This table compares Merck & Co., Inc. and PaxMedica’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Merck & Co., Inc.	13.59%	27.55%	10.73%
PaxMedica	N/A	-3,167.89%	-560.35%

Risk & Volatility

Merck & Co., Inc. has a beta of 0.19, suggesting that its stock price is 81% less volatile than the S&P 500. Comparatively, PaxMedica has a beta of -0.99, suggesting that its stock price is 199% less volatile than the S&P 500.

Insider and Institutional Ownership

76.1% of Merck & Co., Inc. shares are owned by institutional investors. Comparatively, 4.9% of PaxMedica shares are owned by institutional investors. 0.2% of Merck & Co., Inc. shares are owned by insiders. Comparatively, 1.0% of PaxMedica shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Merck & Co., Inc. and PaxMedica”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Merck & Co., Inc.	$65.01 billion	4.96	$18.25 billion	$3.55	36.76
PaxMedica	N/A	N/A	-$18.29 million	($6.09)	-0.00

Merck & Co., Inc. has higher revenue and earnings than PaxMedica. PaxMedica is trading at a lower price-to-earnings ratio than Merck & Co., Inc., indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Merck & Co., Inc. and PaxMedica, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Merck & Co., Inc.	0	7	13	0	2.65
PaxMedica	0	0	0	0	0.00

Merck & Co., Inc. currently has a consensus price target of $134.50, suggesting a potential upside of 3.07%. Given Merck & Co., Inc.’s stronger consensus rating and higher probable upside, analysts clearly believe Merck & Co., Inc. is more favorable than PaxMedica.

Summary

Merck & Co., Inc. beats PaxMedica on 12 of the 13 factors compared between the two stocks.

About Merck & Co., Inc.

Merck & Co., Inc. is a health care company, which engages in the provision of health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products. It operates through the following segments: Pharmaceutical, Animal Health, and Other. The Pharmaceutical segment includes human health pharmaceutical and vaccine products. The Animal Health segment discovers, develops, manufactures, and markets animal health products, such as pharmaceutical and vaccine products, for the prevention, treatment and control of disease in livestock, and companion animal species. The Other segment consists of sales for the non-reportable segments of healthcare services. The company was founded in 1891 and is headquartered in Rahway, NJ.

About PaxMedica

PaxMedica, Inc., a clinical stage biopharmaceutical company, focuses on the development of anti-purinergic drug therapies for the treatment of disorders with intractable neurologic symptoms. Its lead product candidate is PAX-101 that is in Phase 3 clinical trials, an intravenous formulation of suramin for the treatment of autism spectrum disorder, myalgic encephalomyelitis/chronic fatigue syndrome, long COVID-19 syndrome, fragile X syndrome, human African trypanosomiasis (HAT), and fragile X-associated tremor/ataxia syndrome. The company is developing PAX-102, an intranasal formulation of suramin for neurologic indications, as well as other new chemical entities that are targeted and selective antagonists of purine receptor subtypes; and PAX-HAT-301 for the treatment of HAT. It has a research collaboration agreement with PolarMar Health for Phase II clinical trial in austism spectrum disorder for emodin, which retains the rights for PolarMar to develop and commercialize any non-prescription supplement form of the product, and for PaxMedica, Inc. to retain exclusive rights to develop and commercialize a highly purified form of emodin. The company was formerly known as Purinix Pharmaceuticals LLC and changed its name to PaxMedica, Inc. in April 2020. PaxMedica, Inc. was incorporated in 2018 and is based in Tarrytown, New York.