Critical Analysis: Liquidia (NASDAQ:LQDA) and Adagene (NASDAQ:ADAG)

Liquidia (NASDAQ:LQDA) and Adagene (NASDAQ:ADAG) are both small-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, risk, institutional ownership, profitability and valuation.

Volatility and Risk

Liquidia has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500. Comparatively, Adagene has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500.

Profitability

This table compares Liquidia and Adagene’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Liquidia	-674.42%	-177.83%	-78.50%
Adagene	N/A	N/A	N/A

Valuation and Earnings

This table compares Liquidia and Adagene’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Liquidia	$14.84 million	72.66	-$78.50 million	($1.56)	-9.04
Adagene	$815,746.00	135.33	-$18.95 million	N/A	N/A

Adagene has lower revenue, but higher earnings than Liquidia.

Institutional and Insider Ownership

64.5% of Liquidia shares are owned by institutional investors. Comparatively, 9.5% of Adagene shares are owned by institutional investors. 31.6% of Liquidia shares are owned by company insiders. Comparatively, 21.2% of Adagene 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.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Liquidia and Adagene, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Liquidia	1	1	5	0	2.57
Adagene	0	0	1	0	3.00

Liquidia presently has a consensus target price of $22.00, indicating a potential upside of 55.92%. Adagene has a consensus target price of $5.00, indicating a potential upside of 100.00%. Given Adagene’s stronger consensus rating and higher possible upside, analysts plainly believe Adagene is more favorable than Liquidia.

Summary

Adagene beats Liquidia on 8 of the 12 factors compared between the two stocks.

About Liquidia

Liquidia Corporation, a biopharmaceutical company, develops, manufactures, and commercializes various products for unmet patient needs in the United States. Its lead product candidates include YUTREPIA, an inhaled dry powder formulation of treprostinil for the treatment of pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD). The company also offers Remodulin, a treprostinil administered through continuous intravenous and subcutaneous infusion. The company also a license agreement with Pharmosa Biopharm Inc to develop and commercialize L606, an inhaled sustained-release formulation of Treprostinil for the treatment of PAH and PH-ILD. Liquidia Corporation was founded in 2004 and is headquartered in Morrisville, North Carolina.

About Adagene

Adagene Inc., a clinical stage biotechnology company, engages in the research, development, and production of monoclonal antibody drugs for cancers. The company's product candidates include ADG106, a human ligand-blocking agonistic anti- CD137 IgG4 monoclonal antibodies (mAbs) that is in Phase 1b/2 clinical trials for the treatment advanced solid tumors and non-Hodgkin's lymphoma; ADG126, a masked fully-human anti-CTLA-4 mAb that is in Phase 1 clinical trial for the treatment advanced/metastatic solid tumors; and ADG116, a human ligand-blocking anti-CTLA-4 mAb, which is in Phase 1b/2 clinical development for the treatment of advanced/metastatic solid tumors. It also offers ADG104, an anti-PD-L1 mAb that is in Phase 2 clinical development; ADG125, a novel anti-CSF-1R mAb, which is in Phase I clinical trial; ADG206, a masked, Fc engineered anti-CD137 agonistic POWERbody; ADG153, a masked anti-CD47 IgG1 SAFEbody, which is in preclinical for the treatment hematologic and solid tumors; ADG138, novel HER2xCD3 POWERbody, which is in preclinical for the treatment HER2-expressing solid tumors; and ADG152, a v POWERbody, which is in preclinical stage for the treatment off-tumor toxicities, as well as develops anti-CD28 bispecific POWERbody TCEs. The company was incorporated in 2011 and is headquartered in Suzhou, China.