Critical Review: Mereo BioPharma Group (NASDAQ:MREO) & Biohaven (NYSE:BHVN)

Mereo BioPharma Group (NASDAQ:MREO) and Biohaven (NYSE:BHVN) are both medical companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for Mereo BioPharma Group and Biohaven, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mereo BioPharma Group	0	0	4	1	3.20
Biohaven	0	0	10	1	3.09

Mereo BioPharma Group currently has a consensus price target of $7.50, suggesting a potential upside of 70.84%. Biohaven has a consensus price target of $54.44, suggesting a potential upside of 52.29%. Given Mereo BioPharma Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe Mereo BioPharma Group is more favorable than Biohaven.

Valuation & Earnings

This table compares Mereo BioPharma Group and Biohaven”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mereo BioPharma Group	$1.00 million	615.73	-$29.47 million	N/A	N/A
Biohaven	$462.51 million	7.31	-$408.17 million	($6.83)	-5.23

Mereo BioPharma Group has higher earnings, but lower revenue than Biohaven.

Profitability

This table compares Mereo BioPharma Group and Biohaven’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mereo BioPharma Group	N/A	N/A	N/A
Biohaven	N/A	-212.83%	-157.42%

Institutional & Insider Ownership

62.8% of Mereo BioPharma Group shares are owned by institutional investors. Comparatively, 88.8% of Biohaven shares are owned by institutional investors. 4.1% of Mereo BioPharma Group shares are owned by insiders. Comparatively, 16.0% of Biohaven shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Mereo BioPharma Group has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, Biohaven has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500.

Summary

Mereo BioPharma Group beats Biohaven on 6 of the 11 factors compared between the two stocks.

About Mereo BioPharma Group

Mereo BioPharma Group plc, a biopharmaceutical company, develops and commercializes therapeutics for the treatment of oncology and rare diseases in the United Kingdom, the United States, and internationally. It develops Etigilimab (MPH-313), an antibody T-cell immunoreceptor with Ig and ITIM domains, which is in Phase 1b clinical trial for the treatment of tumors. The company is also developing Navicixizumab (OMP-305B83), which has completed Phase 1b clinical trials for the treatment of the late line ovarian cancer; Acumapimod (BCT-197), a p38 MAP kinase inhibitor that is in Phase II clinical trials to treat acute exacerbations of chronic obstructive pulmonary disease; and Leflutrozole (BGS-649), an oral aromatase inhibitor for the treatment of hypogonadotropic hypogonadism which is in Phase 2 trials. In addition, it develops rare disease product candidates, including Setrusumab (BPS-804), an antibody for the treatment of osteogenesis imperfecta; and Alvelestat (MPH-966), an oral small molecule that is in Phase II clinical trial to treat Alpha-1 anti-trypsin deficiency. The company has a license agreement with Feng Biosciences for the development and commercialization of navicixizumab; license agreement with ReproNovo for the development and commercialization of leflutrozole; licensing agreement with AstraZeneca; and license agreement with Ultragenyx Pharmaceutical Inc. to develop and commercialize setrusumab. Mereo BioPharma Group plc was incorporated in 2015 and is headquartered in London, the United Kingdom.

About Biohaven

Biohaven Ltd., together with its subsidiaries, focuses on discovering, developing, and commercializing therapies for immunology, neuroscience, and oncology worldwide. The company's pipeline products include Troriluzole, which is in Phase 3 clinical trial for the treatment of neurological and neuropsychiatric illnesses; BHV-5500 that blocks glutamate signaling mediated by post-synaptic NMDA receptors; Taldefgrobep Alfa, which is in Phase 3 clinical trial for the treatment of spinal muscular atrophy and obesity; BHV-7000, a candidate in Phase 2/3 clinical trials for the treatment of focal and generalized epilepsy, bipolar disorder, and major depressive disorder; BHV-2100 that is in Phase 1 clinical trials for the treatment of migraines and neuropathic pain; and BHV-8000, a product candidate in Phase 1 clinical trials for the treatment of early Alzheimer's and Parkinson's disease, sclerosis, and amyloid-related imaging abnormalities. It also offers BHV-1300, a product candidate in Phase 1 clinical trials to treat rheumatoid arthritis; BHV-1310 for the treatment of generalized myasthenia gravis and acute exacerbations or flares; BHV-1400 to treat IgA Nephropathy; and BHV-1600 for the treatment of dilated cardiomyopathy. In addition, the company develops BHV-1100, a product candidate in Phase 1a/1b clinical trials for multiple myeloma patients; BHV-1510, a preclinical product that targets carcinomas; and BHV-1500 for Hodgkin's lymphoma. It has license, development, and commercialization agreements with Yale University, AstraZeneca, University of Connecticut, Artizan Biosciences Inc., Reliant Glycosciences LLC, Katholieke Universiteit Leuven, BMS, and Highlightll Pharmaceutical Co. Ltd. The company was formerly known as Biohaven Research Ltd and changed its name to Biohaven Ltd. in September 2022. Biohaven Ltd. was incorporated in 2022 and is headquartered in New Haven, Connecticut.