- Verrica Pharmaceuticals Inc. (NASDAQ:VRCA) is facing challenges in capital efficiency with a ROIC of -166.93% and a WACC of 17.28%.
- Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) shows relatively better performance in capital efficiency among its peers with a ROIC to WACC ratio of -4.26.
- Scholar Rock Holding Corporation (NASDAQ:SRRK) has the lowest efficiency in capital utilization with a ROIC to WACC ratio of -17.94.
Verrica Pharmaceuticals Inc. (NASDAQ:VRCA) is a dermatology therapeutics company focused on developing treatments for skin diseases. The company is currently facing challenges in capital efficiency, as indicated by its financial metrics. In the pharmaceutical industry, efficient capital utilization is crucial for sustaining operations and funding research and development.
Verrica’s Return on Invested Capital (ROIC) is -166.93%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 17.28%. This negative ROIC suggests that the company is not generating sufficient returns on its investments. The ROIC to WACC ratio of -9.66 further highlights the inefficiency in capital utilization relative to its cost.
In comparison, Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) has a ROIC of -27.64% and a WACC of 6.49%, resulting in a ROIC to WACC ratio of -4.26. Although still negative, YMAB’s ratio is the highest among the peers, indicating a relatively better performance in capital efficiency. This suggests that YMAB is managing its capital more effectively than VRCA.
Scholar Rock Holding Corporation (NASDAQ:SRRK) has the lowest ROIC to WACC ratio at -17.94, with a ROIC of -109.48% and a WACC of 6.10%. This indicates that SRRK is the least efficient in utilizing its capital among the peers. Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) and Kezar Life Sciences, Inc. (NASDAQ:KZR) also show negative ROIC to WACC ratios, but they are not as low as SRRK’s.
Overall, while all companies in this analysis are operating with negative ROICs, Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) stands out as having the highest ROIC to WACC ratio. This suggests that YMAB is the least inefficient in terms of capital utilization among the group, despite the overall negative performance in the sector.
