Critical Analysis: Recursion Pharmaceuticals (NASDAQ:RXRX) versus Vir Biotechnology (NASDAQ:VIR)

Vir Biotechnology (NASDAQ:VIR) and Recursion Pharmaceuticals (NASDAQ:RXRX) are both small-cap medical companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Analyst Ratings

This is a summary of current ratings and price targets for Vir Biotechnology and Recursion Pharmaceuticals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vir Biotechnology	0	3	3	0	2.50
Recursion Pharmaceuticals	0	2	2	0	2.50

Vir Biotechnology currently has a consensus target price of $33.00, suggesting a potential upside of 295.21%. Recursion Pharmaceuticals has a consensus target price of $12.67, suggesting a potential upside of 101.70%. Given Vir Biotechnology’s higher possible upside, equities analysts clearly believe Vir Biotechnology is more favorable than Recursion Pharmaceuticals.

Profitability

This table compares Vir Biotechnology and Recursion Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vir Biotechnology	-612.40%	-30.93%	-26.01%
Recursion Pharmaceuticals	-755.37%	-86.35%	-61.05%

Risk & Volatility

Vir Biotechnology has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500. Comparatively, Recursion Pharmaceuticals has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500.

Valuation and Earnings

This table compares Vir Biotechnology and Recursion Pharmaceuticals’ gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vir Biotechnology	$57.65 million	19.83	-$615.06 million	($4.01)	-2.09
Recursion Pharmaceuticals	$48.62 million	30.70	-$328.07 million	($1.60)	-3.93

Recursion Pharmaceuticals has lower revenue, but higher earnings than Vir Biotechnology. Recursion Pharmaceuticals is trading at a lower price-to-earnings ratio than Vir Biotechnology, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

65.3% of Vir Biotechnology shares are owned by institutional investors. Comparatively, 89.1% of Recursion Pharmaceuticals shares are owned by institutional investors. 15.6% of Vir Biotechnology shares are owned by insiders. Comparatively, 15.8% of Recursion Pharmaceuticals shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Vir Biotechnology beats Recursion Pharmaceuticals on 7 of the 13 factors compared between the two stocks.

About Vir Biotechnology

Vir Biotechnology, Inc., a commercial-stage immunology company, develops therapeutic products to treat and prevent serious infectious diseases. It offers tobevibart + elebsiran for the treatment of chronic hepatitis delta; elebsiran + PEG-IFN-a, tobevibart ± elebsiran ± PEG-IFN-a, and elebsiran+ TLR8+PD-1 for the treatment of chronic hepatitis B; VIR-1388 and Cure mAb combination for the treatment of human immunodeficiency virus; VIR-8190 for the treatment of respiratory syncytial virus / human metapneumovirus; VIR-2981 for the treatment of influenza; VIR-1949 for the treatment of pre-cancerous HPV lesions; and VIR07229 and Sotrovimab for the treatment of COVID-19 infection under the Xevudy brand. The company has grant agreements with Bill & Melinda Gates Foundation and National Institutes of Health; an option and license agreement with Brii Biosciences Limited; a collaboration and license agreement with Alnylam Pharmaceuticals, Inc.; license agreements with MedImmune; collaboration with WuXi Biologics and Glaxo Wellcome UK Ltd.; and a collaborative research agreement with GlaxoSmithKline Biologicals SA. It also has a manufacturing agreement with Samsung Biologics Co.,Ltd. for the manufacture of SARS-COV-2 antibodies. The company was incorporated in 2016 and is headquartered in San Francisco, California.

About Recursion Pharmaceuticals

Recursion Pharmaceuticals, Inc. operates as a clinical-stage biotechnology company, engages in the decoding biology by integrating technological innovations across biology, chemistry, automation, data science, and engineering to industrialize drug discovery. The company develops REC-994, which is in Phase 2 clinical trial to treat cerebral cavernous malformation; REC-2282, which is in Phase 2/3 clinical trial for the treatment of neurofibromatosis type 2; REC-4881, which is in Phase 1b/2 clinical trial to treat familial adenomatous polyposis; REC-3964, which is in Phase 1 clinical trial to treat Clostridioides difficile infection; and REC-4881, which is in Phase 2 clinical trial to treat AXIN1 or APC mutant cancers. Its preclinical stage product includes RBM39 to treat HR-proficient ovarian cancer. The company has collaboration and agreement with Bayer AG; the University of Utah Research Foundation; Ohio State Innovation Foundation; Roche & Genentech; and Takeda Pharmaceutical Company Limited. Recursion Pharmaceuticals, Inc. was incorporated in 2013 and is headquartered in Salt Lake City, Utah.