Financial Analysis: Ligand Pharmaceuticals (NASDAQ:LGND) versus ESSA Pharma (NASDAQ:EPIX)

Ligand Pharmaceuticals (NASDAQ:LGND) and ESSA Pharma (NASDAQ:EPIX) are both medical companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Institutional and Insider Ownership

91.3% of Ligand Pharmaceuticals shares are held by institutional investors. Comparatively, 75.1% of ESSA Pharma shares are held by institutional investors. 5.9% of Ligand Pharmaceuticals shares are held by company insiders. Comparatively, 15.5% of ESSA Pharma shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Ligand Pharmaceuticals and ESSA Pharma”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ligand Pharmaceuticals	$152.42 million	14.54	$52.15 million	$2.51	46.74
ESSA Pharma	N/A	N/A	-$28.54 million	($0.64)	-2.69

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

Profitability

This table compares Ligand Pharmaceuticals and ESSA Pharma’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ligand Pharmaceuticals	29.68%	4.95%	4.39%
ESSA Pharma	N/A	-21.64%	-21.02%

Volatility and Risk

Ligand Pharmaceuticals has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500. Comparatively, ESSA Pharma has a beta of 1.6, indicating that its stock price is 60% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Ligand Pharmaceuticals and ESSA Pharma, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ligand Pharmaceuticals	0	0	6	0	3.00
ESSA Pharma	0	3	0	0	2.00

Ligand Pharmaceuticals presently has a consensus target price of $147.00, suggesting a potential upside of 25.31%. ESSA Pharma has a consensus target price of $9.50, suggesting a potential upside of 452.33%. Given ESSA Pharma’s higher probable upside, analysts clearly believe ESSA Pharma is more favorable than Ligand Pharmaceuticals.

Summary

Ligand Pharmaceuticals beats ESSA Pharma on 10 of the 13 factors compared between the two stocks.

About Ligand Pharmaceuticals

Ligand Pharmaceuticals Incorporated, a biopharmaceutical company, engages in the development and licensing of biopharmaceutical assets worldwide. Its commercial programs include Kyprolis and Evomela, which are used to treat multiple myeloma; Rylaze, a recombinant erwinia asparaginase for the treatment of acute lymphoblastic leukemia or lymphoblastic lymphoma in adult and pediatric patients; Filspari, a dual endothelin and angiotensin II receptor antagonist in development for rare kidney diseases and non-immunosuppressive treatment indicated for immunoglobulin A nephropathy; Teriparatide injection product for osteoporosis; Vaxneuvance for the prevention of invasive disease caused by streptococcus pneumoniae serotypes; and Pneumosil, a pneumococcal conjugate vaccine to help fight against pneumococcal pneumonia among children. The company also offers TZIELD, a CD3-directed antibody indicated to delay the onset of Stage 3 type 1 diabetes (T1D) in adults and children aged 8 years and older with Stage 2 T1D; Nexterone, a captisol-enabled formulation of amiodarone; Zulresso, a captisol-enabled formulation of brexanolone for the treatment of postpartum depression; and Veklury, an antiviral treatment for moderate or severe COVID-19. In addition, it provides Noxafil-IV, a captisol-enabled formulation of posaconazole for IV use; Duavee for the treatment of post-menopausal symptoms in women; Exemptia for autoimmune diseases; Vivitra for breast cancer; and Bryxta and Zybev for various indications. The company has alliances, licenses, and other business relationships with Amgen, Merck, Pfizer, Jazz, Takeda, Gilead Sciences, and Baxter International. Further, it sells Captisol materials. Ligand Pharmaceuticals Incorporated was incorporated in 1987 and is based in Jupiter, Florida.

About ESSA Pharma

ESSA Pharma Inc., a clinical stage pharmaceutical company, focuses the development of small molecule drugs for the treatment of prostate cancer. The company’s lead candidate EPI-7386, an androgen receptor based resistance mechanisms that develop in patients with castration-resistant prostate cancer and metastatic castration-resistant prostate cancer. It has collaboration agreements with Bayer Consumer Care AG; Janssen Research & Development, LLC; and Astellas Pharma Inc. ESSA Pharma Inc. was incorporated in 2009 and is headquartered in Vancouver, Canada.