Critical Comparison: Avadel Pharmaceuticals (NASDAQ:AVDL) & Provention Bio (NASDAQ:PRVB)

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Avadel Pharmaceuticals (NASDAQ:AVDL) and Provention Bio (NASDAQ:PRVB) are both small-cap medical companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, earnings, valuation and risk.

Institutional & Insider Ownership

51.6% of Avadel Pharmaceuticals shares are held by institutional investors. Comparatively, 7.5% of Provention Bio shares are held by institutional investors. 15.2% of Avadel Pharmaceuticals shares are held by company insiders. Comparatively, 19.6% of Provention Bio shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Avadel Pharmaceuticals and Provention Bio’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avadel Pharmaceuticals -135.48% -608.04% -31.34%
Provention Bio N/A -78.97% -73.96%

Analyst Recommendations

This is a summary of current ratings for Avadel Pharmaceuticals and Provention Bio, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avadel Pharmaceuticals 0 0 2 0 3.00
Provention Bio 0 0 4 0 3.00

Avadel Pharmaceuticals presently has a consensus target price of $6.00, suggesting a potential upside of 23.71%. Provention Bio has a consensus target price of $19.88, suggesting a potential upside of 138.60%. Given Provention Bio’s higher possible upside, analysts clearly believe Provention Bio is more favorable than Avadel Pharmaceuticals.

Volatility & Risk

Avadel Pharmaceuticals has a beta of 1.68, suggesting that its share price is 68% more volatile than the S&P 500. Comparatively, Provention Bio has a beta of 5.68, suggesting that its share price is 468% more volatile than the S&P 500.

Earnings and Valuation

This table compares Avadel Pharmaceuticals and Provention Bio’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Avadel Pharmaceuticals $103.27 million 1.76 -$95.30 million ($1.99) -2.44
Provention Bio N/A N/A -$26.48 million ($1.19) -7.00

Provention Bio has lower revenue, but higher earnings than Avadel Pharmaceuticals. Provention Bio is trading at a lower price-to-earnings ratio than Avadel Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.

Summary

Provention Bio beats Avadel Pharmaceuticals on 8 of the 12 factors compared between the two stocks.

About Avadel Pharmaceuticals

Avadel Pharmaceuticals plc operates as a specialty pharmaceutical company in the United States, France, and Ireland. The company primarily develops FT218, which is in a Phase 3 clinical trial for the treatment of narcolepsy patients suffering from excessive daytime sleepiness (EDS) and cataplexy. It also markets three sterile injectable drugs used in the hospital setting, including Akovaz that is indicated for the treatment of clinically important hypotension occurring in the setting of anesthesia; Bloxiverz, a cholinesterase inhibitor indicated for the reversal of the effects of non-depolarizing neuromuscular blocking agents after surgery; and Vazculep, a phenylephrine hydrochloride injection indicated for the treatment of clinically important hypotension. The company was formerly known as Flamel Technologies SA and changed its name to Avadel Pharmaceuticals PLC in January 2017. Avadel Pharmaceuticals plc was incorporated in 2015 and is headquartered in Dublin, Ireland.

About Provention Bio

Provention Bio, Inc., a clinical stage biopharmaceutical company, focuses on the development and commercialization of novel therapeutics and cutting-edge solutions to intercept and prevent immune-mediated diseases. Its products candidates include PRV-031 teplizumab and monoclonal antibodies (mAb) that is in Phase III clinical trial for the interception of type one diabetes (T1D); PRV-6527, oral CSF-1R inhibitor, which is in Phase 2a clinical trial for the treatment of Crohn's disease; PRV-300, anti-TLR3 mAb, which is in Phase 1b clinical trial for the treatment of ulcerative colitis; PRV-3279 for the treatment of lupus; and PRV-101, a multivalent coxsackie virus vaccine for the prevention of acute Coxsackie Virus B Vaccine and the prevention of the onset of T1D. The company has a licensing and co-development agreement with Amgen Inc. for AMG 714. The company was incorporated in 2016 and is based in Oldwick, New Jersey.

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