Analyzing Biofrontera (NASDAQ:BFRI) & Sage Therapeutics (NASDAQ:SAGE)

Sage Therapeutics (NASDAQ:SAGE) and Biofrontera (NASDAQ:BFRI) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, earnings, dividends, risk and valuation.

Volatility & Risk

Sage Therapeutics has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500. Comparatively, Biofrontera has a beta of 0.27, indicating that its stock price is 73% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sage Therapeutics	-317.29%	-50.29%	-45.48%
Biofrontera	-36.31%	-565.73%	-96.64%

Analyst Recommendations

This is a breakdown of recent ratings for Sage Therapeutics and Biofrontera, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sage Therapeutics	2	16	2	0	2.00
Biofrontera	0	0	1	0	3.00

Sage Therapeutics presently has a consensus price target of $10.53, suggesting a potential upside of 43.26%. Biofrontera has a consensus price target of $7.00, suggesting a potential upside of 560.38%. Given Biofrontera’s stronger consensus rating and higher probable upside, analysts plainly believe Biofrontera is more favorable than Sage Therapeutics.

Valuation and Earnings

This table compares Sage Therapeutics and Biofrontera”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sage Therapeutics	$86.46 million	5.20	-$541.49 million	($5.58)	-1.32
Biofrontera	$34.07 million	0.24	-$20.13 million	($2.26)	-0.47

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

Institutional and Insider Ownership

99.2% of Sage Therapeutics shares are held by institutional investors. Comparatively, 10.1% of Biofrontera shares are held by institutional investors. 5.5% of Sage Therapeutics shares are held by company insiders. Comparatively, 0.2% of Biofrontera shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Sage Therapeutics beats Biofrontera on 8 of the 14 factors compared between the two stocks.

About Sage Therapeutics

Sage Therapeutics, Inc., a biopharmaceutical company, develops and commercializes brain health medicines. Its product candidates include ZULRESSO, a CIV injection for the treatment of postpartum depression (PPD) in adults; and ZURZUVAE, a neuroactive steroid, a positive allosteric modulator of GABAA receptors, targeting both synaptic and extrasynaptic GABAA receptors, for the treatment of postpartum depression. Its product pipeline also comprises SAGE-324, a compound that is in Phase II clinical trial to treat essential tremors, as well as has completed Phase I clinical trial for epilepsy and Parkinson's diseases; and SAGE-718, an oxysterol-based positive allosteric modulator of the NMDA receptor, which is in Phase II clinical trial for the treatment of depression, Huntington's disease, Parkinson's diseases, Alzheimer's disease, attention deficit hyperactivity disorder, schizophrenia, and neuropathic pain. The company has a strategic collaboration with Shionogi & Co., Ltd. for the development and commercialization of zuranolone in Japan, Taiwan, and South Korea; and a collaboration and license agreement with Biogen MA Inc. to jointly develop and commercialize SAGE-217 and SAGE-324 products. The company was formerly known as Sterogen Biopharma, Inc. and changed its name to Sage Therapeutics, Inc. in September 2011. Sage Therapeutics, Inc. was incorporated in 2010 and is headquartered in Cambridge, 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.