Critical Survey: Innovus Pharmaceuticals (OTCMKTS:INNV) and Akorn (OTCMKTS:AKRX)

Akorn (NASDAQ:AKRX) and Innovus Pharmaceuticals (OTCMKTS:INNV) are both small-cap medical companies, but which is the better business? We will compare the two companies based on the strength of their valuation, earnings, dividends, analyst recommendations, risk, profitability and institutional ownership.

Earnings and Valuation

This table compares Akorn and Innovus Pharmaceuticals’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Akorn $694.02 million 0.51 -$401.91 million ($0.36) -7.81
Innovus Pharmaceuticals $23.99 million 0.19 -$8.28 million ($4.16) -0.43

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

Profitability

This table compares Akorn and Innovus Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Akorn -72.25% -17.88% -5.08%
Innovus Pharmaceuticals -34.02% -1,053.29% -82.10%

Volatility & Risk

Akorn has a beta of 1.9, indicating that its share price is 90% more volatile than the S&P 500. Comparatively, Innovus Pharmaceuticals has a beta of 2.22, indicating that its share price is 122% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Akorn and Innovus Pharmaceuticals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Akorn 0 3 3 0 2.50
Innovus Pharmaceuticals 0 0 1 0 3.00

Akorn presently has a consensus price target of $6.80, suggesting a potential upside of 141.99%. Given Akorn’s higher possible upside, analysts plainly believe Akorn is more favorable than Innovus Pharmaceuticals.

Insider & Institutional Ownership

66.4% of Akorn shares are owned by institutional investors. Comparatively, 0.2% of Innovus Pharmaceuticals shares are owned by institutional investors. 3.9% of Akorn shares are owned by company insiders. Comparatively, 12.8% of Innovus Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Akorn beats Innovus Pharmaceuticals on 8 of the 14 factors compared between the two stocks.

About Akorn

Akorn, Inc., a specialty generic pharmaceutical company, develops, manufactures, and markets generic and branded prescription pharmaceuticals, over-the-counter (OTC) consumer health products, and animal health pharmaceuticals in the United States and internationally. The company operates in two segments, Prescription Pharmaceuticals and Consumer Health. The Prescription Pharmaceuticals segment offers generic and branded prescription pharmaceuticals in various dosage forms, including sterile ophthalmics, injectables, and inhalants; and non-sterile oral liquids, topicals, nasal sprays, and otics. Its primary products include Akten, a topical ocular anesthetic gel; AzaSite, an antibiotic used to treat bacterial conjunctivitis; Cosopt, Cosopt PF, Betimol, and Zioptan, which are used in the treatment of glaucoma; and Xopenex inhalation solution used in the treatment or prevention of bronchospasm. The Consumer Health segment manufactures and markets OTC products for the treatment of dry eye under the TheraTears brand. It also markets other OTC consumer health products comprising Mag-Ox, a magnesium supplement; and the Diabetic Tussin line of cough and cold products. In addition, this segment offers a portfolio of animal health products, such as Anased and VetaKet veterinary sedatives; Tolazine and Yobine sedative reversing agents; and Butorphic, a pain reliever. Akorn, Inc. was founded in 1971 and is headquartered in Lake Forest, Illinois.

About Innovus Pharmaceuticals

Innovus Pharmaceuticals, Inc., a pharmaceutical company, engages in the development, licensing, and commercialization of non-prescription medicines and consumer care products in the United States. Its products include Zestra, a proprietary blend of essential oils to enhance desire, arousal, and satisfaction in women; EjectDelay, an over-the-counter monograph compliant benzocaine gel for premature ejaculation; Sensum+, a non-medicated cream for penile sensitivity; Zestra Glide, a water-based longer lasting lubricant; Vesele, a proprietary oral supplement for promoting sexual health; and Androferti, a natural supplement to support male reproductive health and sperm quality. The company also offers Beyond Human testosterone booster, ketones, krill oil, omega 3 fish oil, Vision Formula, blood sugar, colon cleanse, green coffee extract, and growth agent; RecalMax for brain health; UriVarx, a supplement for overactive bladder and urinary incontinence; PEVarx, a supplement for peak sexual performance; ProstaGorx, a supplement for prostate support; and FlutiCare, a nasal spray. In addition, its products include Apeaz for pain relief; AllerVarx for allergy relief; ArthriVarx for joint pain; Xyralid, a hemorrhoid cream; Can-C eye drop and eye care capsule; MZS, a melatonin formula to enhance sleep patterns; and Diabasens, a diabetic foot cream. The company's pipeline products comprise UriVarx for urinary tract infection; Xyralid suppositories for hemorrhoidal symptoms; GlucoGorx supplement, glucometer, lancing device, and GlucoGorx strip for blood sugar levels; Vesele and RecalMax nitric oxide strips. It markets and sells its products through commercial partners to primary care physicians, urologists, gynecologists, and therapists, as well as to other healthcare providers; and directly to consumers through online channels, retailers, and wholesalers. Innovus Pharmaceuticals, Inc. was founded in 2008 and is headquartered in San Diego, California.

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