Critical Analysis: Sonnet BioTherapeutics (NASDAQ:SONN) & Prothena (NASDAQ:PRTA)

Prothena (NASDAQ:PRTA) and Sonnet BioTherapeutics (NASDAQ:SONN) are both small-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, dividends and risk.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Prothena and Sonnet BioTherapeutics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prothena	0	2	5	0	2.71
Sonnet BioTherapeutics	0	0	2	0	3.00

Prothena currently has a consensus price target of $61.86, indicating a potential upside of 268.20%. Sonnet BioTherapeutics has a consensus price target of $30.00, indicating a potential upside of 480.27%. Given Sonnet BioTherapeutics’ stronger consensus rating and higher probable upside, analysts clearly believe Sonnet BioTherapeutics is more favorable than Prothena.

Risk and Volatility

Prothena has a beta of 0.18, indicating that its stock price is 82% less volatile than the S&P 500. Comparatively, Sonnet BioTherapeutics has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500.

Insider & Institutional Ownership

97.1% of Prothena shares are held by institutional investors. Comparatively, 9.4% of Sonnet BioTherapeutics shares are held by institutional investors. 28.2% of Prothena shares are held by company insiders. Comparatively, 2.0% of Sonnet BioTherapeutics shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Prothena and Sonnet BioTherapeutics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Prothena	-23.44%	-9.00%	-7.51%
Sonnet BioTherapeutics	-11,187.19%	-398.45%	-142.16%

Earnings & Valuation

This table compares Prothena and Sonnet BioTherapeutics”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prothena	$91.37 million	9.89	-$147.03 million	($3.25)	-5.17
Sonnet BioTherapeutics	$55,881.00	287.92	-$18.83 million	N/A	N/A

Sonnet BioTherapeutics has lower revenue, but higher earnings than Prothena.

Summary

Prothena beats Sonnet BioTherapeutics on 7 of the 12 factors compared between the two stocks.

About Prothena

Prothena Corporation plc, a late-stage clinical biotechnology company, focuses on discovery and development of novel therapies to treat diseases caused by protein dysregulation in the United States. The company is involved in developing birtamimab, an investigational humanized antibody that is in Phase III clinical trial for the treatment of AL amyloidosis; Prasinezumab, a humanized monoclonal antibody, for the treatment of Parkinson's disease and other related synucleinopathies which is in Phase IIb clinical trial; NNC6019 that is in Phase lI clinical trial for the treatment of ATTR amyloidosis; and BMS-986446 and PRX012, which is in Phase I clinical trial for the treatment of Alzheimer's disease. Its discovery and preclinical programs include PRX123, a dual Aß-Tau vaccine for the treatment and prevention of Alzheimer's disease; and PRX019 for the treatment of neurogenerative diseases, as well as TDP-43 for the treatment of amyotrophic lateral sclerosis. Prothena Corporation plc has a license, development, and commercialization agreement with F. Hoffmann-La Roche Ltd. and Hoffmann-La Roche Inc. to develop and commercialize antibodies that target a-synuclein, including prasinezumab; and a collaboration agreement with Bristol-Myers Squibb to develop and commercialize antibodies targeting tau, TDP-43. The company was incorporated in 2012 and is based in Dublin, Ireland.

About Sonnet BioTherapeutics

Sonnet BioTherapeutics Holdings, Inc., a biotechnology company, owns a platform for biologic medicines of single or bifunctional action. The company develops fully human albumin binding technology, which utilizes human single chain antibodies fragment that binds to and hitch-hikes on human serum albumin for transport to target tissues. Its lead product candidate is SON-1010, a fully human single-chain version of interleukin 12 that is in Phase 1b/2a clinical trial for the treatment of solid tumor indications, including ovarian cancer, non-small cell lung cancer, and head and neck cancer. The company is also developing SON-080, a fully human version of interleukin 6, which is in Phase 1b/I2a clinical trail to treat chemotherapy-induced peripheral neuropathy and diabetic peripheral neuropathy; and SON-1210, a bispecific compound for solid tumor indications, including colorectal cancer. It has a license agreement with New Life Therapeutics Pte, LTD. to develop and commercialize pharmaceutical preparations containing a specific recombinant human interleukin-6. The company is headquartered in Princeton, New Jersey.