Reviewing Infinity Pharmaceuticals (NASDAQ:INFI) & Novan (NASDAQ:NOVN)

Infinity Pharmaceuticals (NASDAQ:INFIGet Rating) and Novan (NASDAQ:NOVNGet Rating) are both small-cap medical companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitability, earnings, dividends, institutional ownership, analyst recommendations and valuation.

Analyst Ratings

This is a breakdown of recent ratings for Infinity Pharmaceuticals and Novan, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Infinity Pharmaceuticals 0 0 6 0 3.00
Novan 0 0 3 0 3.00

Infinity Pharmaceuticals currently has a consensus price target of $6.83, suggesting a potential upside of 836.07%. Novan has a consensus price target of $20.00, suggesting a potential upside of 773.36%. Given Infinity Pharmaceuticals’ higher possible upside, research analysts plainly believe Infinity Pharmaceuticals is more favorable than Novan.

Profitability

This table compares Infinity Pharmaceuticals and Novan’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Infinity Pharmaceuticals -2,254.97% -175.11% -51.97%
Novan -838.95% -165.01% -40.79%

Insider and Institutional Ownership

54.7% of Infinity Pharmaceuticals shares are owned by institutional investors. Comparatively, 13.0% of Novan shares are owned by institutional investors. 8.8% of Infinity Pharmaceuticals shares are owned by company insiders. Comparatively, 2.0% of Novan shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Infinity Pharmaceuticals and Novan’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Infinity Pharmaceuticals $1.86 million 34.99 -$45.26 million ($0.52) -1.40
Novan $2.96 million 14.83 -$29.69 million ($1.88) -1.22

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

Volatility and Risk

Infinity Pharmaceuticals has a beta of 2.17, meaning that its share price is 117% more volatile than the S&P 500. Comparatively, Novan has a beta of 0.2, meaning that its share price is 80% less volatile than the S&P 500.

Summary

Infinity Pharmaceuticals beats Novan on 7 of the 12 factors compared between the two stocks.

About Infinity Pharmaceuticals (Get Rating)

Infinity Pharmaceuticals, Inc., a biopharmaceutical company, focuses on developing novel medicines for people with cancer. Its product candidate is IPI-549, an orally administered clinical-stage immuno-oncology product candidate that inhibits the enzyme phosphoinositide-3-kinase-gamma, which is in Phase 2 clinical trials for the treatment of metastatic triple negative breast cancer and urothelial cancer; and Phase 1/1b clinical trials for the treatment of solid tumors. The company has strategic alliances with Intellikine, Inc. to discover, develop, and commercialize pharmaceutical products targeting the delta and/or gamma isoforms of PI3K; Verastem, Inc. to research, develop, commercialize, and manufacture duvelisib and products containing duvelisib; and PellePharm, Inc. to develop and commercialize rights to its hedgehog inhibitor program, IPI-926, a clinical-stage product candidate, as well as collaboration agreements with Arcus Biosciences, Inc., F. Hoffmann-La Roche Ltd., and Bristol Myers Squibb Company. Infinity Pharmaceuticals, Inc. was incorporated in 1995 and is headquartered in Cambridge, Massachusetts.

About Novan (Get Rating)

Novan, Inc., a pre-commercial nitric oxide-based pharmaceutical company, focuses on dermatology and anti-infective therapies. Its clinical stage dermatology drug candidates include SB204, a topical monotherapy for the treatment of acne vulgaris; SB206, a topical anti-viral gel for the treatment of viral skin infections; SB208, a topical broad-spectrum anti-fungal gel for the treatment of fungal infections of the skin and nails, including athlete's foot and fungal nail infections; and SB414, a topical cream-based gel product candidate for the treatment of inflammatory skin diseases. The company also develops SB207, an anti-viral product candidate for the treatment of external genital warts; WH602, a nitric oxide-containing intravaginal gel to treat high-risk human papilloma virus (HPV); WH504, a non-gel formulation product candidate to treat high-risk HPV; and SB019 for the treatment of SARS-CoV-2. Novan, Inc. has a license agreement with Sato Pharmaceutical Co., Ltd.; and a strategic alliance with Orion Corporation. Novan, Inc. was incorporated in 2006 and is headquartered in Durham, North Carolina.

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