Critical Comparison: Valeritas (VLRX) versus Arch Therapeutics (ARTH)

Valeritas (NASDAQ: VLRX) and Arch Therapeutics (OTCMKTS:ARTH) are both small-cap medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, institutional ownership, risk, analyst recommendations and valuation.

Analyst Recommendations

This is a summary of recent ratings and target prices for Valeritas and Arch Therapeutics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Valeritas 0 1 2 0 2.67
Arch Therapeutics 0 0 3 0 3.00

Valeritas presently has a consensus target price of $11.00, suggesting a potential upside of 504.40%. Arch Therapeutics has a consensus target price of $3.00, suggesting a potential upside of 906.71%. Given Arch Therapeutics’ stronger consensus rating and higher probable upside, analysts plainly believe Arch Therapeutics is more favorable than Valeritas.


This table compares Valeritas and Arch Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Valeritas -243.52% -337.47% -75.42%
Arch Therapeutics N/A -181.04% -96.16%

Earnings and Valuation

This table compares Valeritas and Arch Therapeutics’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Valeritas $20.25 million 0.63 -$49.30 million ($8.29) -0.22
Arch Therapeutics N/A N/A -$7.78 million N/A N/A

Arch Therapeutics has lower revenue, but higher earnings than Valeritas.

Volatility & Risk

Valeritas has a beta of 4.26, meaning that its share price is 326% more volatile than the S&P 500. Comparatively, Arch Therapeutics has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500.

Institutional & Insider Ownership

5.0% of Valeritas shares are held by institutional investors. Comparatively, 0.0% of Arch Therapeutics shares are held by institutional investors. 1.2% of Valeritas shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.


Arch Therapeutics beats Valeritas on 6 of the 11 factors compared between the two stocks.

About Valeritas

Valeritas, Inc. is a United States-based company, which is engaged in developing and commercializing treatment solutions that contribute to clinical outcomes for patients. The Company’s portfolio includes V-Go disposable insulin delivery device, which is distributed through retail pharmacy. Its V-Go delivers insulin at a continuous preset basal rate and bolus dosing for adults with Type 2 diabetes requiring insulin. Its development portfolio also includes the h-Patch technology, the Mini-Ject pre-filled needle-free delivery system and the Micro-Trans microneedle transdermal delivery patch. Its h-Patch is a controlled delivery technology platform designed to deliver drugs into subcutaneous tissue. The Mini-Ject represents needle-free injection system, combining a range of fully disposable pre-filled options. Micro-Trans microneedle array patch technology enables drug delivery into the dermis without limitations of drug size, structure, charge or the patient’s skin characteristics.

About Arch Therapeutics

Arch Therapeutics, Inc. is a development-stage company. The Company operates as a biotechnology company. The Company focuses on developing products to stop bleeding (hemostasis) and control leaking (sealant) during surgery and trauma care. The Company’s technology is based on a self-assembling peptide that creates a physical, mechanical barrier, which could be applied to seal organs or wounds that are leaking blood and other fluids. The Company’s primary product candidates, collectively known as the AC5 Devices (AC5), are designed to achieve hemostasis in surgical procedures. The Company’s product candidates rely on its self-assembling peptide technology and are designed to achieve hemostasis in skin wounds, and minimally invasive and open surgical procedures. The Company focuses on developing other product candidates based on its technology platform for use in a range of indications. As of September 30, 2016, the Company had not generated any revenues.

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