Critical Analysis: Connect Biopharma (NASDAQ:CNTB) versus KALA BIO (NASDAQ:KALA)

KALA BIO (NASDAQ:KALA) and Connect Biopharma (NASDAQ:CNTB) are both small-cap medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for KALA BIO and Connect Biopharma, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KALA BIO	0	0	2	0	3.00
Connect Biopharma	0	0	1	0	3.00

KALA BIO currently has a consensus target price of $15.00, indicating a potential upside of 120.91%. Connect Biopharma has a consensus target price of $8.00, indicating a potential upside of 640.74%. Given Connect Biopharma’s higher possible upside, analysts clearly believe Connect Biopharma is more favorable than KALA BIO.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
KALA BIO	N/A	-448.61%	-69.37%
Connect Biopharma	N/A	N/A	N/A

Volatility & Risk

KALA BIO has a beta of -2.15, meaning that its share price is 315% less volatile than the S&P 500. Comparatively, Connect Biopharma has a beta of -0.34, meaning that its share price is 134% less volatile than the S&P 500.

Insider & Institutional Ownership

24.6% of KALA BIO shares are owned by institutional investors. Comparatively, 58.7% of Connect Biopharma shares are owned by institutional investors. 8.3% of KALA BIO shares are owned by insiders. Comparatively, 22.6% of Connect Biopharma shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares KALA BIO and Connect Biopharma”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KALA BIO	$3.89 million	8.05	-$42.20 million	($12.47)	-0.54
Connect Biopharma	N/A	N/A	-$59.50 million	N/A	N/A

KALA BIO has higher revenue and earnings than Connect Biopharma.

Summary

Connect Biopharma beats KALA BIO on 6 of the 9 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 Connect Biopharma

Connect Biopharma Holdings Limited, a clinical-stage biopharmaceutical company, engages in the development of therapies for the treatment of T cell-driven inflammatory diseases. The company is building a pipeline of small molecules and antibodies using functional T cell assays to screen and discover potent product candidates against validated immune targets. Its lead product candidate is rademikibart (formerly CBP-201), an antibody designed to target interleukin-4 receptor alpha, which is a validated target for the treatment of inflammatory diseases such as atopic dermatitis and asthma, currently under Phase 3 studies; and icanbelimod (formerly CBP-307), an oral small molecule Sphingosine 1-Phosphate Receptor 1 modulator, currently under Phase 2 clinical for the treatment of ulcerative colitis and Crohn's disease. The company was founded in 2012 and is based in San Diego, California.