Cortexyme (NASDAQ:CRTX) vs. Prime Medicine (NYSE:PRME) Critical Review

Prime Medicine (NYSE:PRME) and Cortexyme (NASDAQ:CRTX) are both small-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, profitability, risk, valuation, earnings and analyst recommendations.

Profitability

This table compares Prime Medicine and Cortexyme’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Prime Medicine	N/A	-107.87%	-74.97%
Cortexyme	N/A	-70.96%	-63.53%

Valuation & Earnings

This table compares Prime Medicine and Cortexyme”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prime Medicine	$5.98 million	114.46	-$198.13 million	($1.44)	-2.63
Cortexyme	N/A	N/A	-$89.94 million	($2.97)	-0.72

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

Risk and Volatility

Prime Medicine has a beta of 2.64, meaning that its stock price is 164% more volatile than the S&P 500. Comparatively, Cortexyme has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for Prime Medicine and Cortexyme, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prime Medicine	0	3	4	1	2.75
Cortexyme	0	0	0	0	0.00

Prime Medicine currently has a consensus price target of $9.21, indicating a potential upside of 142.96%. Given Prime Medicine’s stronger consensus rating and higher possible upside, analysts clearly believe Prime Medicine is more favorable than Cortexyme.

Insider and Institutional Ownership

70.4% of Prime Medicine shares are owned by institutional investors. Comparatively, 63.2% of Cortexyme shares are owned by institutional investors. 22.7% of Prime Medicine shares are owned by company insiders. Comparatively, 27.9% of Cortexyme shares are owned by company 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

Prime Medicine beats Cortexyme on 8 of the 13 factors compared between the two stocks.

About Prime Medicine

Prime Medicine, Inc., a biotechnology company, delivers genetic therapies to address the spectrum of diseases by deploying gene editing technology. The company offers Prime Editors with a Prime Editor protein, comprising a fusion between a Cas protein and a reverse transcriptase enzyme; and a pegRNA, which targets the Prime Editor to a specific genomic location and provides a template for making the desired edit to the target DNA sequence. It has a research collaboration with Cimeio Therapeutics to develop Prime Edited Shielded-Cell & Immunotherapy Pairs for genetic diseases, acute myeloid leukemia, and myelodysplastic syndrome. The company was incorporated in 2019 and is based in Cambridge, Massachusetts.

About Cortexyme

Cortexyme, Inc., a clinical stage biopharmaceutical company, focuses on developing therapeutics for Alzheimer's and other degenerative diseases. Its lead drug candidate is atuzaginstat (COR388), an orally administered brain-penetrating small molecule gingipain inhibitor, which is in Phase II/III clinical trial for use in patients with mild to moderate Alzheimer's disease, as well as for the treatment of oral squamous cell carcinoma, periodontitis, and coronavirus infection. The company was incorporated in 2012 and is headquartered in South San Francisco, California.