Reviewing Scilex (NASDAQ:SCLX) & Cognition Therapeutics (NASDAQ:CGTX)

Cognition Therapeutics (NASDAQ:CGTX) and Scilex (NASDAQ:SCLX) are both small-cap medical companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, earnings, valuation, profitability, analyst recommendations and dividends.

Risk and Volatility

Cognition Therapeutics has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500. Comparatively, Scilex has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500.

Profitability

This table compares Cognition Therapeutics and Scilex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cognition Therapeutics	N/A	-118.11%	-84.49%
Scilex	-233.88%	N/A	-111.82%

Institutional & Insider Ownership

43.3% of Cognition Therapeutics shares are held by institutional investors. Comparatively, 69.7% of Scilex shares are held by institutional investors. 20.8% of Cognition Therapeutics shares are held by company insiders. Comparatively, 8.7% of Scilex shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for Cognition Therapeutics and Scilex, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cognition Therapeutics	0	2	4	0	2.67
Scilex	0	0	3	0	3.00

Cognition Therapeutics presently has a consensus price target of $8.00, indicating a potential upside of 1,304.00%. Scilex has a consensus price target of $8.00, indicating a potential upside of 669.23%. Given Cognition Therapeutics’ higher possible upside, analysts plainly believe Cognition Therapeutics is more favorable than Scilex.

Valuation and Earnings

This table compares Cognition Therapeutics and Scilex’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cognition Therapeutics	N/A	N/A	-$25.79 million	($0.92)	-0.62
Scilex	$50.83 million	3.71	-$114.33 million	($1.31)	-0.79

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

Summary

Cognition Therapeutics beats Scilex on 9 of the 13 factors compared between the two stocks.

About Cognition Therapeutics

Cognition Therapeutics, Inc., a clinical-stage biopharmaceutical company, engages in the discovery and development of small molecule therapeutics targeting age-related degenerative diseases and disorders of the central nervous system and retina. Its lead product candidate is CT1812, an orally delivered molecule modulator designed to penetrate the blood-brain barrier and bind selectively to the S2R complex, which is in Phase 2 clinical trial for the treatment of Alzheimer's disease, as well as geographic atrophy secondary to dry age-related macular degeneration and synucleinopathies, such as dementia with Lewy bodies. The company was incorporated in 2007 and is headquartered in Purchase, New York.

About Scilex

Scilex Holding Company focuses on acquiring, developing, and commercializing non-opioid pain management products for the treatment of acute and chronic pain. Its commercial products include ZTlido (lidocaine topical system) 1.8% (ZTlido), a prescription lidocaine topical product for the relief of neuropathic pain associated with postherpetic neuralgia (PHN), which is a form of post-shingles nerve pain; ELYXYB, a ready-to-use oral solution for the acute treatment of migraine with or without aura in adults; and GLOPERBA, a liquid oral version of the anti-gout medicine colchicine indicated for the prophylaxis of painful gout flares in adults. The company is also developing three product candidates, including SP-102 (10 mg dexamethasone sodium phosphate viscous gel) (SEMDEXA), a novel viscous gel formulation of a used corticosteroid for epidural injections, which has completed a Phase 3 study to treat lumbosacral radicular pain or sciatica; SP-103 (lidocaine topical system) 5.4% (SP-103), a formulation of ZTlido for the treatment of chronic neck pain and low back pain (LBP) that has completed a Phase 2 trial; and SP-104 (4.5 mg low-dose naltrexone hydrochloride delayed-release capsules) (SP-104), a novel low-dose delayed-release naltrexone hydrochloride, which has completed Phase 1 trials for the treatment of fibromyalgia. The company is headquartered in Palo Alto, California.