Critical Review: Sagimet Biosciences (NASDAQ:SGMT) & Lipella Pharmaceuticals (NASDAQ:LIPO)

Sagimet Biosciences (NASDAQ:SGMT) and Lipella Pharmaceuticals (NASDAQ:LIPO) are both small-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Sagimet Biosciences and Lipella Pharmaceuticals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sagimet Biosciences	0	1	4	0	2.80
Lipella Pharmaceuticals	0	0	1	0	3.00

Sagimet Biosciences currently has a consensus price target of $24.00, suggesting a potential upside of 692.08%. Lipella Pharmaceuticals has a consensus price target of $2.00, suggesting a potential upside of 369.37%. Given Sagimet Biosciences’ higher probable upside, research analysts clearly believe Sagimet Biosciences is more favorable than Lipella Pharmaceuticals.

Earnings and Valuation

This table compares Sagimet Biosciences and Lipella Pharmaceuticals’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sagimet Biosciences	$2.00 million	46.04	-$27.88 million	N/A	N/A
Lipella Pharmaceuticals	$449,617.00	7.21	-$4.62 million	N/A	N/A

Lipella Pharmaceuticals has lower revenue, but higher earnings than Sagimet Biosciences.

Profitability

This table compares Sagimet Biosciences and Lipella Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sagimet Biosciences	N/A	-23.16%	-22.26%
Lipella Pharmaceuticals	-991.79%	-171.66%	-145.43%

Institutional and Insider Ownership

87.9% of Sagimet Biosciences shares are owned by institutional investors. Comparatively, 74.3% of Lipella Pharmaceuticals shares are owned by institutional investors. 17.6% of Sagimet Biosciences shares are owned by insiders. Comparatively, 39.6% of Lipella Pharmaceuticals shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Sagimet Biosciences beats Lipella Pharmaceuticals on 8 of the 11 factors compared between the two stocks.

About Sagimet Biosciences

Sagimet Biosciences Inc., a clinical-stage biopharmaceutical company, develops therapeutics called fatty acid synthase (FASN) inhibitors for the treatment of diseases that result from dysfunctional metabolic pathways in the United States. The company's lead drug candidate is Denifanstat, a once-daily pill and selective FASN inhibitor for the treatment of metabolic dysfunction associated steatohepatitis. It also develops TVB-3567, a FASN inhibitor for the treatment of acne; and other oncology programs. The company was formerly known as 3-V Biosciences, Inc. and changed its name to Sagimet Biosciences Inc. in August 2019. Sagimet Biosciences Inc. was incorporated in 2006 and is headquartered in San Mateo, California.

About Lipella Pharmaceuticals

Lipella Pharmaceuticals Inc., a biotechnology company, focuses on developing drugs by reformulating the active agents in existing generic drugs and optimizing these reformulations for various applications. The company develops LP-10, a formulation of tacrolimus that has completed Phase 2a clinical trial for patients with radiation-induced hemorrhagic cystitis; LP-310, a formulation of tacrolimus for the treatment of oral lichen planus; and LP-410, an oral liposomal formulation of tacrolimus for the treatment of oral graft-versus-host disease (GVHD). Lipella Pharmaceuticals Inc. was incorporated in 2005 and is headquartered in Pittsburgh, Pennsylvania.