Critical Contrast: Kadmon Holdings (KDMN) & Vericel Corporation (VCEL)

Kadmon Holdings (NASDAQ: KDMN) and Vericel Corporation (NASDAQ:VCEL) are both small-cap biopharmaceuticals companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, analyst recommendations, valuation and profitability.

Analyst Ratings

This is a breakdown of recent recommendations for Kadmon Holdings and Vericel Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kadmon Holdings 1 1 3 0 2.40
Vericel Corporation 0 0 3 0 3.00

Kadmon Holdings currently has a consensus target price of $9.75, indicating a potential upside of 173.88%. Vericel Corporation has a consensus target price of $6.33, indicating a potential upside of 56.38%. Given Kadmon Holdings’ higher possible upside, equities analysts clearly believe Kadmon Holdings is more favorable than Vericel Corporation.

Institutional and Insider Ownership

35.0% of Vericel Corporation shares are owned by institutional investors. 3.3% of Vericel Corporation shares are owned 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.

Earnings & Valuation

This table compares Kadmon Holdings and Vericel Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Kadmon Holdings N/A N/A N/A ($5.56) -0.64
Vericel Corporation $54.38 million 2.60 -$19.56 million ($0.88) -4.60

Kadmon Holdings has higher revenue, but lower earnings than Vericel Corporation. Vericel Corporation is trading at a lower price-to-earnings ratio than Kadmon Holdings, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Kadmon Holdings and Vericel Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kadmon Holdings -754.62% N/A -155.28%
Vericel Corporation -45.11% -265.45% -52.01%

Summary

Vericel Corporation beats Kadmon Holdings on 7 of the 9 factors compared between the two stocks.

About Kadmon Holdings

Kadmon Holdings, Inc. is an integrated biopharmaceutical company engaged in the discovery, development and commercialization of small molecules and biologics to address disease areas of various unmet medical needs. The Company is developing product candidates in a number of indications within autoimmune and fibrotic disease, oncology and genetic diseases. Its product pipeline consists of KD025, Tesevatinib and KD034. The Company’s other products include Ribasphere RibaPak, Ribasphere, Qsymia, Tetrabenazine and Valganciclovir. KD025 is an orally available, selective small molecule inhibitor of Rho-associated coiled-coil kinase 2 (ROCK2), a molecular target in multiple autoimmune, fibrotic and neurodegenerative diseases. Tesevatinib is an oral tyrosine kinase inhibitor (TKI) designed to block key molecular drivers of tumor growth, metastases and drug resistance. KD034 is the Company’s portfolio of enhanced formulations of trientine hydrochloride for the treatment of Wilson’s disease.

About Vericel Corporation

Vericel Corporation, formerly Aastrom Biosciences, Inc., is a commercial-stage biopharmaceutical company dedicated to the identification, development and commercialization of therapies that enable the body to repair and regenerate damaged tissues and organs to restore normal structure and function. The Company operates through the research, product development, manufacture and distribution of patient-specific, expanded cellular therapies for use in the treatment of specific diseases segment. Its autologous cell therapy products include Carticel (autologous cultured chondrocytes), which is an autologous chondrocyte implant for the treatment of cartilage defects in the knee, and Epicel (cultured epidermal autografts), which is a permanent skin replacement for the treatment of patients with deep-dermal or full-thickness burns. The Company is developing MACI, which is a third-generation autologous chondrocyte implant and ixmyelocel-T, which is a patient-specific multicellular therapy.

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