Insmed (INSM) & Epizyme (EPZM) Critical Comparison

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Insmed (NASDAQ: INSM) and Epizyme (NASDAQ:EPZM) are both small-cap medical companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, earnings, risk, institutional ownership, dividends and valuation.

Valuation and Earnings

This table compares Insmed and Epizyme’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Insmed N/A N/A -$192.64 million ($2.89) -6.94
Epizyme $10.00 million 103.12 -$134.30 million ($2.18) -6.81

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

Risk and Volatility

Insmed has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500. Comparatively, Epizyme has a beta of 1.96, indicating that its share price is 96% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Insmed and Epizyme, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Insmed 0 2 7 0 2.78
Epizyme 0 1 12 0 2.92

Insmed currently has a consensus price target of $37.44, indicating a potential upside of 86.66%. Epizyme has a consensus price target of $23.64, indicating a potential upside of 59.17%. Given Insmed’s higher possible upside, equities analysts clearly believe Insmed is more favorable than Epizyme.

Profitability

This table compares Insmed and Epizyme’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Insmed N/A -78.04% -57.74%
Epizyme N/A -64.88% -51.70%

Insider & Institutional Ownership

99.1% of Insmed shares are owned by institutional investors. Comparatively, 85.9% of Epizyme shares are owned by institutional investors. 4.0% of Insmed shares are owned by company insiders. Comparatively, 25.2% of Epizyme shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Epizyme beats Insmed on 10 of the 12 factors compared between the two stocks.

Insmed Company Profile

Insmed Incorporated is a biopharmaceutical company. The Company operates through development and commercialization of therapies for patients with rare diseases segment. Its lead product candidate is ARIKAYCE, or liposomal amikacin for inhalation (LAI), which is in late-stage development for adult patients with treatment refractory nontuberculous mycobacteria (NTM) lung disease caused by Mycobacterium avium complex (MAC). Its earlier-stage pipeline includes preclinical compounds that the Company is evaluating in multiple rare diseases of unmet medical need, including methicillin-resistant staph aureus and NTM. Its earlier clinical-stage pipeline includes INS1007 and INS1009. INS1007 is an oral, reversible inhibitor of dipeptidyl peptidase 1. INS1009 is an inhaled nanoparticle formulation of a treprostinil prodrug that may offer a differentiated product profile for rare pulmonary disorders, including pulmonary arterial hypertension. It has completed a Phase I study of INS1009.

Epizyme Company Profile

Epizyme, Inc., a clinical stage biopharmaceutical company, discovers and develops novel epigenetic medicines for patients with cancer and other diseases in the United States. Its product candidates include tazemetostat, an inhibitor of the EZH2, which is in Phase II clinical trial for patients with relapsed or refractory non-hodgkin lymphoma (NHL); Phase II clinical trial for relapsed or refractory patients with mesothelioma; Phase I dose-escalation and expansion study for children with INI1-negative solid tumors; Phase II clinical trials for patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL); Phase Ib/II clinical trial in elderly patients with DLBCL; and Phase II clinical trial for relapsed or refractory patients with mesothelioma characterized by BAP1 loss-of-function,; and Phase Ib/II clinical trial for the treatment of patients with relapsed or refractory metastatic non-small cell lung cancer, as well as Phase II clinical trial in adult patients with ovarian cancer. The company is also developing additional programs, such as pinometostat, an intravenously administered small molecule inhibitor of DOT1L for the treatment of acute leukemias; and PRMT5 inhibitor that is in Phase I clinical trial for patients with solid tumors and NHL. It has collaboration agreements with Celgene Corporation, Genentech Inc., and Glaxo Group Limited, as well as with Roche Molecular Systems, Inc., Eisai Co. Ltd., and Lymphoma Study Association. Epizyme, Inc. was founded in 2007 and is headquartered in Cambridge, Massachusetts.

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