Ardelyx (NASDAQ:ARDX) vs. Biofrontera (NASDAQ:BFRI) Critical Review

Ardelyx (NASDAQ:ARDX) and Biofrontera (NASDAQ:BFRI) are both small-cap healthcare companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, earnings, risk, profitability, institutional ownership, dividends and valuation.

Profitability

This table compares Ardelyx and Biofrontera’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ardelyx	-12.35%	-36.00%	-10.77%
Biofrontera	-13.78%	-145.81%	-31.30%

Insider and Institutional Ownership

58.9% of Ardelyx shares are held by institutional investors. Comparatively, 10.1% of Biofrontera shares are held by institutional investors. 5.3% of Ardelyx shares are held by insiders. Comparatively, 8.1% of Biofrontera shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Ardelyx and Biofrontera, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ardelyx	2	0	9	1	2.75
Biofrontera	1	1	1	0	2.00

Ardelyx currently has a consensus target price of $13.90, indicating a potential upside of 310.03%. Given Ardelyx’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Ardelyx is more favorable than Biofrontera.

Risk & Volatility

Ardelyx has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500. Comparatively, Biofrontera has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.

Earnings and Valuation

This table compares Ardelyx and Biofrontera”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ardelyx	$407.32 million	2.07	-$61.60 million	($0.22)	-15.41
Biofrontera	$41.71 million	0.43	-$10.54 million	($0.45)	-2.69

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

Summary

Ardelyx beats Biofrontera on 11 of the 15 factors compared between the two stocks.

About Ardelyx

Ardelyx, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines to treat gastrointestinal and cardiorenal therapeutic areas in the United States and internationally. The company’s lead product candidate is tenapanor for the treatment of patients with irritable bowel syndrome with constipation. It also develops XPHOZAH, which is in Phase III clinical trial to reduce serum phosphorus in adults with chronic kidney disease (CKD)on dialysis, or hyperphosphatemia; RDX013, a potassium secretagogue, for the treatment of elevated serum potassium, or hyperkalemia, a problem among patients with kidney and/or heart failure; and RDX020, for adult patients with metabolic acidosis, a serious electrolyte disorder. The company has agreements with Kyowa Kirin, Fosun Pharmaceutical Industrial Development Co. Ltd., and Knight Therapeutics, Inc. for the development and commercialization of tenapanor in their respective territories. The company was formerly known as Nteryx, Inc. and changed its name to Ardelyx, Inc. in June 2008. Ardelyx, Inc. was incorporated in 2007 and is headquartered in Waltham, Massachusetts.

About Biofrontera

Biofrontera Inc., a biopharmaceutical company, engages in the commercialization of pharmaceutical products for the treatment of dermatological conditions in the United States. The company's products are used for the treatment of actinic keratoses, which are pre-cancerous skin lesions, as well as impetigo, a bacterial skin infection. It offers Ameluz, a prescription drug for use in combination with the RhodoLED lamp series, for photodynamic therapy for the lesion-directed and field-directed treatment of actinic keratosis of mild-to-moderate severity on the face and scalp. The company also provides Xepi, a topical non-fluorinated quinolone that inhibits bacterial growth for the treatment of impetigo. The company was incorporated in 2015 and is headquartered in Woburn, Massachusetts.