Minerva Neurosciences up More Than 100% This Week, but Is It a Better Pick Than Vertex Pharma? Minerva Neurosciences (NERV) and Vertex Pharmaceuticals (VRTX) are expected to benefit from the rising number of chronic diseases and continued technological advancements in the industry. Since NERV has gained more...

By Spandan Khandelwal

This story originally appeared on StockNews

shutterstock.com - StockNews

Minerva Neurosciences (NERV) and Vertex Pharmaceuticals (VRTX) are expected to benefit from the rising number of chronic diseases and continued technological advancements in the industry. Since NERV has gained more than 100% this week, is it a better investment than VRTX? Read more to find out….

Minerva Neurosciences, Inc. (NERV), a clinical-stage biopharmaceutical company, focuses on developing and commercializing product candidates for treating central nervous system diseases. Vertex Pharmaceuticals Incorporated (VRTX), a biotechnology company, develops and commercializes therapies for treating cystic fibrosis.

Increasing chronic diseases and an aging population should drive the biotechnology industry's growth. In addition, biotech companies are integrating advanced technologies in the drug development process, which should help them grow significantly.

Data Bridge Market Research shows that the biotechnology market is expected to grow at a CAGR of 27.9% to reach $2,691,409.16 million by 2028.

With billionaire Steve Cohen's Point72 Asset Management purchasing 470,000 shares of NERV and the company's submission of a new drug application to the FDA, the stock has gained more than 100% this week.

While NERV has gained 165.4% over the past month, VRTX returned 3.8%. However, VRTX is the clear winner with 32.5% returns versus NERV's 17.2% in terms of year-to-date performance.

But which stock is a better buy now? Let's find out.

Recent Financial Results

For the second quarter ending June 30, 2022, NERV's loss from operations amounted to $6.97 million, while its net loss came in at $8.72 million. The company's loss per share came in at $1.63.

In the second quarter ending June 30, 2022, VRTX's revenue increased 22% year-over-year to $2.20 billion. Its non-GAAP operating income grew 1571.8% from its year-ago value to $1.19 billion. Its non-GAAP net income improved 2,062.8% from its prior-year quarter to $930 million. The company's non-GAAP EPS rose 2,017.6% year-over-year to $3.60.

Expected Financial Performance

NERV's EPS is expected to decline 54.5% in the current year and 32.4% next year.

On the other hand, VRTX's EPS is expected to grow 2.6% in the current quarter, 9.1% in the current year, and 15.5% next year. Its EPS is expected to grow at a rate of 8% per annum over the next five years.

Profitability

VRTX is more profitable, with a gross profit margin of 48.17% compared to NERV's 38.56%. Also, VRTX's 38.26% net income margin compares to NERV's 12.84%.

Furthermore, VRTX's ROE, ROA, and ROTC of 30.24%, 0.05% and 17.15% compare with NERV's negative 352.65%, 0.34% and 128.49%, respectively.

POWR Ratings

NERV has an overall rating of D, which equates to Sell in our proprietary POWR Ratings system. On the other hand, VRTX has an overall rating of A, which translates to Strong Buy. The POWR Ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.

VRTX has an A grade for Quality, in sync with the company's impressive profitability. On the other hand, NERV has a C for Quality, which is justified considering its poor profitability.

Of the 396 stocks in the F-rated Biotech industry, VRTX is ranked #1, while NERV is ranked #287.

Beyond what we've stated above, we have also rated the stocks for Growth, Momentum, Stability, Value, and Sentiment. Click here to view NERV's ratings. Get all VRTX ratings here.

The Winner

Both NERV and VRTX should benefit from the industry's solid growth prospects. Even though NERV has gained more than 100% this week, VRTX's higher profitability and impressive financials make it a better buy now.

Our research shows that odds of success increase when one invests in stocks with an overall rating of Strong Buy or Buy. View all the top-rated stocks in the Biotech industry here.


NERV shares were trading at $6.93 per share on Thursday morning, down $0.58 (-7.72%). Year-to-date, NERV has gained 8.15%, versus a -11.90% rise in the benchmark S&P 500 index during the same period.



About the Author: Spandan Khandelwal


Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing.

More...

The post Minerva Neurosciences up More Than 100% This Week, but Is It a Better Pick Than Vertex Pharma? appeared first on StockNews.com

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

After a 12-Year-Old's Side Hustle Made Over $4,000 in 1 Day, He and His Dad Grew the Business to Nearly $50,000 a Month: 'It Takes Commitment'

Madden Forrest and his father, Steven, turned their passion for football into a lucrative business.

Leadership

Lead From the Top: 5 Core Responsibilities of a CEO

Knowing exactly what the chief executive's role entails is critical for steering a company to success.

Side Hustle

Use This AI-Powered Platform to Turn Your Side Hustle into a Scalable Business

Turn a side hustle into something sustainable with Sellful's ERP White Label plan.

Business News

Is AI the Reason for Your Layoff? New York Becomes the First State to Require Companies to Disclose If So.

It's the first official statewide move towards understanding AI's effect on the labor market.

Innovation

Why This CEO Cut a $500,000 Per Month Product — And What Every Founder Can Learn From It

In a noisy supplement market filled with hype, Jeff Byers is proving that trust, transparency and a back-to-basics approach to wellness are the future.