Head-To-Head Comparison: Ardelyx (NASDAQ:ARDX) & Royalty Pharma (NASDAQ:RPRX)
by Sarita Garza · The Markets DailyRoyalty Pharma (NASDAQ:RPRX – Get Free Report) and Ardelyx (NASDAQ:ARDX – Get Free Report) are both healthcare companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, analyst recommendations, valuation, earnings and risk.
Earnings & Valuation
This table compares Royalty Pharma and Ardelyx”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Royalty Pharma | $2.54 billion | 14.50 | $770.95 million | $1.45 | 44.11 |
| Ardelyx | $407.32 million | 2.31 | -$61.60 million | ($0.22) | -17.18 |
Royalty Pharma has higher revenue and earnings than Ardelyx. Ardelyx is trading at a lower price-to-earnings ratio than Royalty Pharma, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Royalty Pharma has a beta of 0.44, indicating that its stock price is 56% less volatile than the S&P 500. Comparatively, Ardelyx has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current recommendations and price targets for Royalty Pharma and Ardelyx, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Royalty Pharma | 0 | 0 | 8 | 0 | 3.00 |
| Ardelyx | 2 | 0 | 9 | 1 | 2.75 |
Royalty Pharma currently has a consensus target price of $60.86, suggesting a potential downside of 4.85%. Ardelyx has a consensus target price of $13.90, suggesting a potential upside of 267.72%. Given Ardelyx’s higher probable upside, analysts plainly believe Ardelyx is more favorable than Royalty Pharma.
Insider and Institutional Ownership
54.3% of Royalty Pharma shares are owned by institutional investors. Comparatively, 58.9% of Ardelyx shares are owned by institutional investors. 18.8% of Royalty Pharma shares are owned by insiders. Comparatively, 5.3% of Ardelyx shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Profitability
This table compares Royalty Pharma and Ardelyx’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Royalty Pharma | 32.14% | 30.01% | 14.91% |
| Ardelyx | -12.35% | -36.00% | -10.77% |
Summary
Royalty Pharma beats Ardelyx on 10 of the 15 factors compared between the two stocks.
About Royalty Pharma
Royalty Pharma plc operates as a buyer of biopharmaceutical royalties and a funder of innovations in the biopharmaceutical industry in the United States. It is also involved in the identification, evaluation, and acquisition of royalties on various biopharmaceutical therapies. In addition, the company collaborates with innovators from academic institutions, research hospitals and not-for-profits, small and mid-cap biotechnology companies, and pharmaceutical companies. Its portfolio consists of royalties on approximately 35 commercial products and 14 development-stage product candidates that address various therapeutic areas, such as rare disease, cancer, neuroscience, immunology, respiratory, infectious disease, hematology, and diabetes. The company was founded in 1996 and is based in New York, New York.
About Ardelyx
Ardelyx, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines to treat gastrointestinal and cardiorenal therapeutic areas in the United States and internationally. The company’s lead product candidate is tenapanor for the treatment of patients with irritable bowel syndrome with constipation. It also develops XPHOZAH, which is in Phase III clinical trial to reduce serum phosphorus in adults with chronic kidney disease (CKD)on dialysis, or hyperphosphatemia; RDX013, a potassium secretagogue, for the treatment of elevated serum potassium, or hyperkalemia, a problem among patients with kidney and/or heart failure; and RDX020, for adult patients with metabolic acidosis, a serious electrolyte disorder. The company has agreements with Kyowa Kirin, Fosun Pharmaceutical Industrial Development Co. Ltd., and Knight Therapeutics, Inc. for the development and commercialization of tenapanor in their respective territories. The company was formerly known as Nteryx, Inc. and changed its name to Ardelyx, Inc. in June 2008. Ardelyx, Inc. was incorporated in 2007 and is headquartered in Waltham, Massachusetts.