Critical Analysis: Scilex (NASDAQ:SCLX) and Neurocrine Biosciences (NASDAQ:NBIX)

Scilex (NASDAQ:SCLX) and Neurocrine Biosciences (NASDAQ:NBIX) are both healthcare companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, earnings, valuation, institutional ownership, profitability, risk and analyst recommendations.

Risk and Volatility

Scilex has a beta of 1.72, meaning that its share price is 72% more volatile than the S&P 500. Comparatively, Neurocrine Biosciences has a beta of 0.4, meaning that its share price is 60% less volatile than the S&P 500.

Institutional & Insider Ownership

69.7% of Scilex shares are owned by institutional investors. Comparatively, 92.6% of Neurocrine Biosciences shares are owned by institutional investors. 4.5% of Scilex shares are owned by insiders. Comparatively, 4.6% of Neurocrine Biosciences shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Scilex and Neurocrine Biosciences, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Scilex	1	0	0	0	1.00
Neurocrine Biosciences	0	5	18	1	2.83

Neurocrine Biosciences has a consensus price target of $202.73, indicating a potential upside of 40.58%. Given Neurocrine Biosciences’ stronger consensus rating and higher possible upside, analysts plainly believe Neurocrine Biosciences is more favorable than Scilex.

Profitability

This table compares Scilex and Neurocrine Biosciences’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Scilex	-1,414.57%	N/A	-147.00%
Neurocrine Biosciences	20.91%	22.43%	15.64%

Earnings & Valuation

This table compares Scilex and Neurocrine Biosciences”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Scilex	$30.25 million	1.07	-$358.73 million	($49.70)	-0.08
Neurocrine Biosciences	$2.86 billion	5.12	$478.60 million	$6.82	21.15

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

Summary

Neurocrine Biosciences beats Scilex on 14 of the 15 factors compared between the two stocks.

About Scilex

Scilex Holding Company focuses on acquiring, developing, and commercializing non-opioid pain management products for the treatment of acute and chronic pain. Its commercial products include ZTlido (lidocaine topical system) 1.8% (ZTlido), a prescription lidocaine topical product for the relief of neuropathic pain associated with postherpetic neuralgia (PHN), which is a form of post-shingles nerve pain; ELYXYB, a ready-to-use oral solution for the acute treatment of migraine with or without aura in adults; and GLOPERBA, a liquid oral version of the anti-gout medicine colchicine indicated for the prophylaxis of painful gout flares in adults. The company is also developing three product candidates, including SP-102 (10 mg dexamethasone sodium phosphate viscous gel) (SEMDEXA), a novel viscous gel formulation of a used corticosteroid for epidural injections, which has completed a Phase 3 study to treat lumbosacral radicular pain or sciatica; SP-103 (lidocaine topical system) 5.4% (SP-103), a formulation of ZTlido for the treatment of chronic neck pain and low back pain (LBP) that has completed a Phase 2 trial; and SP-104 (4.5 mg low-dose naltrexone hydrochloride delayed-release capsules) (SP-104), a novel low-dose delayed-release naltrexone hydrochloride, which has completed Phase 1 trials for the treatment of fibromyalgia. The company is headquartered in Palo Alto, California.

About Neurocrine Biosciences

Neurocrine Biosciences, Inc. discovers, develops, and markets pharmaceuticals for neurological, neuroendocrine, and neuropsychiatric disorders in the United States and internationally. The company’s products include INGREZZA for tardive dyskinesia and chorea associated with Huntington’s disease; ALKINDI for adrenal insufficiency; Efmody capsules for classic congenital adrenal hyperplasia; Orilissa tablets for endometriosis; and Oriahnn capsules to treat uterine fibroids. Its product candidates in clinical development include valbenazine to treat dyskinetic cerebral palsy in pediatrics and adults; NBI-921352 to treat developmental and epileptic encephalopathy syndrome in pediatrics and adults; NBI-827104 to treat epileptic encephalopathy with continuous spike-and-wave during sleep; NBI-1076986 to treat movement disorders; crinecerfront to treat congenital adrenal hyperplasia in adults and children; EFMODY to treat congenital adrenal hyperplasia and adrenal insufficiency in adults; valbenazine for the adjunctive treatment of schizophrenia; NBI-1065845 for the treatment of inadequate response to treatment in major depressive disorder; luvadaxistat to treat cognitive impairment related to schizophrenia; NBI-1117568 for the treatment of schizophrenia; NBI-1070770 to treat major depressive disorder; NBI-1117570 for the treatment of symptoms of psychosis and cognition in neurological and neuropsychiatric conditions; and NBI-1117569, NBI-1117567, and NBI-1065890 to treat CNS indications. The company also has license and collaboration agreements with Heptares Therapeutics Limited; Takeda Pharmaceutical Company Limited; Idorsia Pharmaceuticals Ltd; Xenon Pharmaceuticals Inc.; Voyager Therapeutics, Inc.; BIAL Portela & Ca, S.A.; Mitsubishi Tanabe Pharma Corporation; and AbbVie Inc. The company was incorporated in 1992 and is headquartered in San Diego, California.