Critical Review: REGENXBIO (NASDAQ:RGNX) versus KALA BIO (NASDAQ:KALA)

KALA BIO (NASDAQ:KALA) and REGENXBIO (NASDAQ:RGNX) are both small-cap medical companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.

Profitability

This table compares KALA BIO and REGENXBIO’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KALA BIO	N/A	-686.43%	-76.81%
REGENXBIO	-110.29%	-78.29%	-34.49%

Risk and Volatility

KALA BIO has a beta of -2.22, meaning that its stock price is 322% less volatile than the S&P 500. Comparatively, REGENXBIO has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500.

Institutional and Insider Ownership

24.6% of KALA BIO shares are held by institutional investors. Comparatively, 88.1% of REGENXBIO shares are held by institutional investors. 8.3% of KALA BIO shares are held by company insiders. Comparatively, 12.8% of REGENXBIO shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares KALA BIO and REGENXBIO”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KALA BIO	N/A	N/A	-$38.51 million	($5.93)	-0.11
REGENXBIO	$83.33 million	8.17	-$227.10 million	($3.47)	-3.88

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

Analyst Ratings

This is a summary of current recommendations and price targets for KALA BIO and REGENXBIO, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KALA BIO	1	4	1	0	2.00
REGENXBIO	1	1	5	0	2.57

KALA BIO currently has a consensus target price of $20.38, suggesting a potential upside of 3,092.07%. REGENXBIO has a consensus target price of $28.63, suggesting a potential upside of 112.83%. Given KALA BIO’s higher possible upside, equities analysts clearly believe KALA BIO is more favorable than REGENXBIO.

Summary

REGENXBIO beats KALA BIO on 9 of the 13 factors compared between the two stocks.

About KALA BIO

KALA BIO, Inc., a clinical-stage biopharmaceutical company, engages in the research, development, and commercialization of innovative therapies for rare and severe eye diseases in the United States. The company's product candidates include KPI-012, which is in Phase 2b clinical trial for the treatment of persistent corneal epithelial defects. Its preclinical development product, including KPI-014 for the treatment of rare inherited retinal diseases. The company was formerly known as Kala Pharmaceuticals, Inc. and changed its name to KALA BIO, Inc. in August 2023. KALA BIO, Inc. was incorporated in 2009 and is headquartered in Arlington, Massachusetts.

About REGENXBIO

REGENXBIO Inc., a clinical-stage biotechnology company, provides gene therapies that deliver functional genes to cells with genetic defects in the United States. Its gene therapy product candidates are based on NAV Technology Platform, a proprietary adeno-associated virus gene delivery platform. The company’s products in pipeline includes ABBV-RGX-314 for the treatment of wet age-related macular degeneration, diabetic retinopathy, and other chronic retinal diseases; and RGX-202, which is in Phase I/II clinical trial for the treatment of Duchenne muscular dystrophy. It also develops RGX-121 for the treatment of mucopolysaccharidosis type II that is in Phase III clinical trial; RGX-111 for treating mucopolysaccharidosis type I; RGX-181 for the treatment of late infantile neuronal ceroid lipofuscinosis type II; and RGX-381 to treat the ocular manifestations of CLN2 disease. In addition, the company licenses its NAV Technology Platform to other biotechnology and pharmaceutical companies. Further, it has a collaboration and license agreement with AbbVie Global Enterprises Ltd. to develop ABBV-RGX-314 outside the United States. REGENXBIO Inc. was incorporated in 2008 and is headquartered in Rockville, Maryland.