Critical Comparison: Horizon Pharma (HZNP) versus Opko Health (OPK)

Horizon Pharma (NASDAQ: HZNP) and Opko Health (NASDAQ:OPK) are both mid-cap medical companies, but which is the better business? We will contrast the two companies based on the strength of their risk, profitability, earnings, dividends, analyst recommendations, valuation and institutional ownership.

Profitability

This table compares Horizon Pharma and Opko Health’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Horizon Pharma -45.28% 20.22% 5.35%
Opko Health -9.45% -5.17% -3.94%

Earnings & Valuation

This table compares Horizon Pharma and Opko Health’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Horizon Pharma $981.12 million 2.50 -$166.83 million ($3.05) -4.91
Opko Health $1.22 billion 2.05 -$25.08 million ($0.22) -20.32

Opko Health has higher revenue and earnings than Horizon Pharma. Opko Health is trading at a lower price-to-earnings ratio than Horizon Pharma, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Horizon Pharma has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, Opko Health has a beta of 1.82, meaning that its share price is 82% more volatile than the S&P 500.

Institutional and Insider Ownership

86.6% of Horizon Pharma shares are owned by institutional investors. Comparatively, 22.9% of Opko Health shares are owned by institutional investors. 3.2% of Horizon Pharma shares are owned by company insiders. Comparatively, 40.2% of Opko Health shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations for Horizon Pharma and Opko Health, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Horizon Pharma 0 1 10 0 2.91
Opko Health 0 2 5 0 2.71

Horizon Pharma currently has a consensus price target of $19.18, indicating a potential upside of 27.96%. Opko Health has a consensus price target of $14.21, indicating a potential upside of 217.99%. Given Opko Health’s higher possible upside, analysts plainly believe Opko Health is more favorable than Horizon Pharma.

About Horizon Pharma

Horizon Pharma Public Limited Company is a biopharmaceutical company. The Company is focused on identifying, developing, acquiring and commercializing differentiated and accessible medicines that address unmet medical needs. As of December 31, 2016, the Company marketed 11 medicines through its orphan, rheumatology and primary care business units. The Company’s marketed medicines are ACTIMMUNE (interferon gamma-1b), BUPHENYL (sodium phenylbutyrate) Tablets and Powder, DUEXIS (ibuprofen/famotidine), KRYSTEXXA (pegloticase), MIGERGOT (ergotamine tartrate & caffeine suppositories), PENNSAID (diclofenac sodium topical solution) 2% weight per weight (w/w), or PENNSAID 2%, PROCYSBI (cysteamine bitartrate) delayed-release capsules, QUINSAIR (aerosolized form of levofloxacin), RAVICTI (glycerol phenylbutyrate) Oral Liquid, RAYOS (prednisone) delayed-release tablets and VIMOVO (naproxen/esomeprazole magnesium).

About Opko Health

OPKO Health, Inc. is a healthcare company. Its segments include Pharmaceutical, Diagnostics and Corporate. Pharmaceutical consists of the pharmaceutical operations in Chile, Mexico, Ireland, Israel and Spain and its pharmaceutical research and development operations. Diagnostics consists of the clinical laboratory operations in Bio-Reference Laboratories (Bio-Reference) and its point-of-care operations. Through Bio-Reference, it operates laboratory divisions, such as Bio-Reference, GenPath (Oncology), GenPath (Women’s Health), GeneDx and Laboratorio Bueno Salud. As of December 31, 2016, it had one commercial stage pharmaceutical product and several pharmaceutical compounds and technologies in various stages of research and development for a range of indications and conditions, including Renal Products, Biologics, hGH-CTP, Factor VII, Oxyntomodulin, active pharmaceutical ingredients, Oligonucleotide Therapeutics, NK-1 Program, Asthma and chronic obstructive pulmonary disease.

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