Head to Head Review: Merck KGaA (OTCMKTS:MKGAF) vs. Bicycle Therapeutics (NASDAQ:BCYC)

Bicycle Therapeutics (NASDAQ:BCYC) and Merck KGaA (OTCMKTS:MKGAF) are both medical companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Profitability

This table compares Bicycle Therapeutics and Merck KGaA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bicycle Therapeutics	-417.88%	-32.80%	-23.30%
Merck KGaA	12.60%	10.23%	5.75%

Valuation & Earnings

This table compares Bicycle Therapeutics and Merck KGaA’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bicycle Therapeutics	$39.57 million	22.26	-$180.66 million	($4.45)	-4.63
Merck KGaA	$22.72 billion	1.09	$3.06 billion	$6.81	28.19

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

Volatility & Risk

Bicycle Therapeutics has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500. Comparatively, Merck KGaA has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Bicycle Therapeutics and Merck KGaA, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bicycle Therapeutics	0	2	6	0	2.75
Merck KGaA	0	0	0	0	N/A

Bicycle Therapeutics presently has a consensus price target of $45.75, suggesting a potential upside of 122.20%. Given Bicycle Therapeutics’ higher probable upside, analysts plainly believe Bicycle Therapeutics is more favorable than Merck KGaA.

Institutional and Insider Ownership

86.2% of Bicycle Therapeutics shares are owned by institutional investors. Comparatively, 0.1% of Merck KGaA shares are owned by institutional investors. 8.5% of Bicycle Therapeutics shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Merck KGaA beats Bicycle Therapeutics on 8 of the 13 factors compared between the two stocks.

About Bicycle Therapeutics

Bicycle Therapeutics plc, a clinical-stage biopharmaceutical company, develops a class of medicines for diseases that are underserved by existing therapeutics in the United States and the United Kingdom. Its product pipeline comprising BT8009, a bicycle toxin conjugate (BTC) which is in phase I/II/III clinical trial for the treatment of high nectin-4 expressing tumors; BT5528, a BTC which is in phase I/II clinical trial for the treatment of Ephrin type A receptor 2 expressing tumor; BT7480, a Bicycle TICA molecule which is in phase I/II targeting Nectin-4 and agonizing CD137; and BT7455, a Bicycle TICA molecule targeting Ephrin type A receptor 2 and CD137 and is in preclinical trial. The company also developing BT1718, a bicycle toxin conjugate (BTC), which is in Phase I/IIa clinical trials targeting tumors that express Membrane Type 1 matrix metalloprotease; and BT7401, a multivalent bicycle CD137 agonist which is in phase IIa to treat advanced solid tumors. In addition, it develops Novel anti-infective, which is in preclinical trial targeting anti-infectives disease; CNS targets, which is in preclinical trial targeting CNS disease; and Novel neuromuscular targets, which is in preclinical trial targeting neuromuscular disease. Further, the company collaborates with biopharmaceutical companies and organizations to develop programs in therapeutic areas. It has collaboration and license agreement with Bayer Consumer Care AG; Novartis Pharma AG; Cancer Research UK; Cancer Research Technology Ltd; and Oxurion NV. Bicycle Therapeutics plc was incorporated in 2009 and is headquartered in Cambridge, the United Kingdom.

About Merck KGaA

Merck KGaA operates as a science and technology company in Germany. It operates through Life Science, Healthcare, and Electronics segments. The company's Life Science segment offers tools, chemicals, and equipment for academic labs, biotech, and pharmaceutical manufacturers, as well as industrial sector. This segment provides drug manufacturers with process development expertise and technologies, such as continuous bioprocessing; testing kits and services; reagents and services; testing solutions that analyze air, water, and soil; and testing and tools, as well as products that help test nutritional value and identify quality inconsistencies. Its Healthcare segment discovers, develops, manufacturers, and markets prescription drugs and biopharmaceuticals for the treatment of oncology, neurology and immunology, fertility, endocrinology, as well as cardiovascular, diabetes, thyroid disorders, and multiple sclerosis; general medicines; and injection device and disease monitoring software. The Electronics segment supplies materials for the semiconductor and display industries and surface design, such as delivery systems and services, as well as surface solutions, including cosmetics, effect pigments, and functional solutions. In addition, it has in-licensing agreement with Debiopharm International SA for developing and commercializing drug candidates for the treatment of head and neck cancer; Jiangsu Hengrui Pharmaceuticals Co. Ltd. for developing, manufacturing, and commercializing drug candidates for the treatment of metastatic colorectal cancer; and Abbisko Therapeutics Co. Ltd. for developing and commercializing of drug candidates for the treatment of tenosynovial giant cell tumor, as well as license and collaboration agreement with Merck KGaA to discover two targeted protein degraders against critical oncogenic proteins. The company was founded in 1668 and is headquartered in Darmstadt, Germany. Merck KGaA operates as a subsidiary of E. Merck KGaA.