Zymeworks (NASDAQ:ZYME) vs. Arrowhead Pharmaceuticals (NASDAQ:ARWR) Critical Contrast
by Teresa Graham · The Cerbat GemArrowhead Pharmaceuticals (NASDAQ:ARWR – Get Free Report) and Zymeworks (NASDAQ:ZYME – Get Free Report) are both healthcare companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, valuation, institutional ownership, profitability, earnings and dividends.
Volatility & Risk
Arrowhead Pharmaceuticals has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500. Comparatively, Zymeworks has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.
Valuation & Earnings
This table compares Arrowhead Pharmaceuticals and Zymeworks”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Arrowhead Pharmaceuticals | $829.45 million | 14.66 | -$1.63 million | ($2.25) | -38.37 |
| Zymeworks | $105.96 million | 19.55 | -$81.13 million | ($2.02) | -14.45 |
Arrowhead Pharmaceuticals has higher revenue and earnings than Zymeworks. Arrowhead Pharmaceuticals is trading at a lower price-to-earnings ratio than Zymeworks, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
62.6% of Arrowhead Pharmaceuticals shares are owned by institutional investors. Comparatively, 92.9% of Zymeworks shares are owned by institutional investors. 3.6% of Arrowhead Pharmaceuticals shares are owned by company insiders. Comparatively, 33.5% of Zymeworks shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares Arrowhead Pharmaceuticals and Zymeworks’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Arrowhead Pharmaceuticals | -47.79% | -60.06% | -17.37% |
| Zymeworks | -405.31% | -72.30% | -37.18% |
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Arrowhead Pharmaceuticals and Zymeworks, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Arrowhead Pharmaceuticals | 1 | 3 | 9 | 0 | 2.62 |
| Zymeworks | 1 | 1 | 9 | 0 | 2.73 |
Arrowhead Pharmaceuticals currently has a consensus target price of $98.42, indicating a potential upside of 13.99%. Zymeworks has a consensus target price of $41.00, indicating a potential upside of 40.46%. Given Zymeworks’ stronger consensus rating and higher probable upside, analysts plainly believe Zymeworks is more favorable than Arrowhead Pharmaceuticals.
Summary
Zymeworks beats Arrowhead Pharmaceuticals on 7 of the 13 factors compared between the two stocks.
About Arrowhead Pharmaceuticals
Arrowhead Pharmaceuticals, Inc. develops medicines for the treatment of intractable diseases in the United States. The company's products in pipeline includes Plozasiran, which is in Phase 2b and one Phase 3 clinical trial to treat hypertriglyceridemia, mixed dyslipidemia, and chylomicronemia syndrome; Zodasiran that is in Phase 2b clinical trial for the treatment of dyslipidemia and hypertriglyceridemia; ARO-PNPLA3, which is in Phase 1 clinical trial to treat patients with non-alcoholic steatohepatitis; ARO-RAGE that is in Phase 1/2a clinical trial to treat inflammatory pulmonary conditions; and ARO-MUC5AC, which is in Phase 1/2a clinical trial to treat muco-obstructive pulmonary diseases. It also develops ARO-MMP7 that is in Phase 1/2a clinical trial for treatment of idiopathic pulmonary fibrosis; ARO-DUX4 for the treatment of facioscapulohumeral muscular dystrophy; ARO-SOD1 for the potential treatment of amyotrophic lateral sclerosis; and ARO-C3, which is in Phase 1/2a clinical trial for the treatment of patients with various complement mediated or complement associated renal diseases. In addition, the company is involved in the development of JNJ-3989, which is in Phase 2 clinical trial to treat chronic hepatitis B virus infection; Olpasiran that is in Phase 3 clinical trial to reduce the production of apolipoprotein A; GSK-4532990 that is in phase 2 clinical trial to treat liver diseases; HZN-457, which is in phase 1 clinical trial to treat uncontrolled gout; and Fazirsiran that is in Phase 3 clinical trial for the treatment for liver disease associated with alpha-1 antitrypsin deficiency. Arrowhead Pharmaceuticals, Inc. has license and research collaboration agreements with Janssen Pharmaceuticals, Inc.; Takeda Pharmaceutical Company Limited; Horizon Therapeutics Ireland DAC; Amgen Inc.; and Glaxosmithkline Intellectual Property (No. 3) Limited. The company was founded in 2003 and is headquartered in Pasadena, California.
About Zymeworks
Zymeworks Inc., a clinical-stage biopharmaceutical company, discovers, develops, and commercializes biotherapeutics for the treatment of cancer. The company’s lead product candidates include zanidatamab, a novel bispecific antibody that is in Phase 1 and Phase 2 clinical trials for the treatment of biliary tract, gastroesophageal adenocarcinomas, and breast cancer; and ZW49, a biparatopic anti- human epidermal growth factor receptor 2 (HER2) antibody-drug conjugate that is in Phase 1 clinical trial for the treatment of advanced or metastatic HER2-expressing tumors. The company has strategic partnerships with Merck Sharp & Dohme Research Ltd.; Eli Lilly and Company; Bristol-Myers Squibb company; GlaxoSmithKline Intellectual Property Development Ltd.; Daiichi Sankyo Co., Ltd.; Janssen Biotech, Inc.; and BeiGene, Ltd. It also has licensing and research collaboration with LEO Pharma A/S to discover and develop bispecific antibodies; and Iconic Therapeutics, Inc. Zymeworks Inc. was founded in 2003 and is headquartered in Vancouver, Canada.