Critical Review: Zymeworks (NASDAQ:ZYME) vs. Exelixis (NASDAQ:EXEL)

Zymeworks (NASDAQ:ZYME) and Exelixis (NASDAQ:EXEL) are both healthcare companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, earnings, risk, dividends, analyst recommendations, institutional ownership and valuation.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Zymeworks and Exelixis, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zymeworks	1	1	11	0	2.77
Exelixis	1	12	6	1	2.35

Zymeworks presently has a consensus target price of $40.64, suggesting a potential upside of 60.30%. Exelixis has a consensus target price of $50.79, suggesting a potential downside of 15.18%. Given Zymeworks’ stronger consensus rating and higher possible upside, research analysts plainly believe Zymeworks is more favorable than Exelixis.

Volatility and Risk

Zymeworks has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500. Comparatively, Exelixis has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500.

Valuation & Earnings

This table compares Zymeworks and Exelixis”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zymeworks	$37.13 million	48.45	-$81.13 million	($2.02)	-12.55
Exelixis	$2.44 billion	6.09	$782.57 million	$3.18	18.83

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

Institutional and Insider Ownership

92.9% of Zymeworks shares are held by institutional investors. Comparatively, 85.3% of Exelixis shares are held by institutional investors. 33.5% of Zymeworks shares are held by company insiders. Comparatively, 2.6% of Exelixis shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Zymeworks and Exelixis’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zymeworks	-405.31%	-72.30%	-37.18%
Exelixis	35.33%	42.17%	31.76%

Summary

Exelixis beats Zymeworks on 8 of the 15 factors compared between the two stocks.

About Zymeworks

Zymeworks Inc., a clinical-stage biopharmaceutical company, discovers, develops, and commercializes biotherapeutics for the treatment of cancer. The company’s lead product candidates include zanidatamab, a novel bispecific antibody that is in Phase 1 and Phase 2 clinical trials for the treatment of biliary tract, gastroesophageal adenocarcinomas, and breast cancer; and ZW49, a biparatopic anti- human epidermal growth factor receptor 2 (HER2) antibody-drug conjugate that is in Phase 1 clinical trial for the treatment of advanced or metastatic HER2-expressing tumors. The company has strategic partnerships with Merck Sharp & Dohme Research Ltd.; Eli Lilly and Company; Bristol-Myers Squibb company; GlaxoSmithKline Intellectual Property Development Ltd.; Daiichi Sankyo Co., Ltd.; Janssen Biotech, Inc.; and BeiGene, Ltd. It also has licensing and research collaboration with LEO Pharma A/S to discover and develop bispecific antibodies; and Iconic Therapeutics, Inc. Zymeworks Inc. was founded in 2003 and is headquartered in Vancouver, Canada.

About Exelixis

Exelixis, Inc., an oncology company, focuses on the discovery, development, and commercialization of new medicines for difficult-to-treat cancers in the United States. The company offers CABOMETYX tablets for the treatment of patients with advanced renal cell carcinoma who received prior anti-angiogenic therapy; and COMETRIQ capsules for the treatment of progressive and metastatic medullary thyroid cancer. Its CABOMETYX and COMETRIQ are derived from cabozantinib, an inhibitor of multiple tyrosine kinases, including MET, AXL, RET, and VEGF receptors. The company also offers COTELLIC, an inhibitor of MEK as a combination regimen to treat specific forms of advanced melanoma; and MINNEBRO, an oral non-steroidal selective blocker of the mineralocorticoid receptor for the treatment of hypertension in Japan. It develops zanzalintinib, a novel, potent, next-generation oral tyrosine kinase inhibitor (TKI) that targets VEGF receptors, MET and the TAM kinases (TYRO3, AXL and MER); and XB002, a next-generation tissue factor (TF)-targeting ADC, administered via intravenous infusion and composed of a human monoclonal antibody (mAb) against TF that is conjugated to an auristatin-based microtubulin inhibitor (MTI) payload. It has research collaborations and license agreements with Ipsen Pharma SAS; Takeda Pharmaceutical Company Ltd.; F. Hoffmann-La Roche Ltd.; Redwood Bioscience, Inc.; R.P. Scherer Technologies, LLC; Catalent Pharma Solutions, Inc.; NBE Therapeutics AG; Aurigene Discovery Technologies Limited; Iconic Therapeutics, Inc.; Invenra, Inc.; StemSynergy Therapeutics, Inc.; Genentech, Inc.; Bristol-Myers Squibb Company; and Daiichi Sankyo Company, Limited, as well as clinical development agreement with Sairopa B.V. for ADU-1805. The company was formerly known as Exelixis Pharmaceuticals, Inc. and changed its name to Exelixis, Inc. in February 2000. Exelixis, Inc. was incorporated in 1994 and is headquartered in Alameda, California.