Eton Pharmaceuticals, Inc. (NASDAQ:ETON) is a specialty pharmaceutical company focused on developing and commercializing innovative treatments for rare diseases. The company aims to address unmet medical needs by bringing new therapies to market. Eton operates in a competitive landscape alongside companies like Aquestive Therapeutics, Fennec Pharmaceuticals, Eyenovia, Verrica Pharmaceuticals, and Evelo Biosciences.
Eton's Return on Invested Capital (ROIC) is -1.26%, while its Weighted Average Cost of Capital (WACC) is 8.97%. This results in a ROIC to WACC ratio of -0.14, indicating that Eton is not generating returns above its cost of capital. This is a concern for investors as it suggests inefficiency in using its capital to generate profits.
Comparatively, Aquestive Therapeutics has a ROIC of -70.79% and a WACC of 16.11%, leading to a ROIC to WACC ratio of -4.39. Although negative, this is the least negative ratio among Eton's peers, suggesting that Aquestive is relatively closer to achieving returns that meet its cost of capital.
Fennec Pharmaceuticals, with a ROIC of -31.51% and a WACC of 6.83%, has a ROIC to WACC ratio of -4.62. This indicates a significant gap between the returns generated and the cost of capital, similar to Eton's situation. Eyenovia, with a staggering ROIC of -2897.17% and a WACC of 14.83%, has the most negative ratio at -195.29, highlighting severe inefficiencies.
Verrica Pharmaceuticals and Evelo Biosciences also show negative ROIC to WACC ratios of -9.62 and -22.28, respectively. These figures reflect the broader challenge faced by these companies in generating returns that exceed their cost of capital, a critical factor for long-term financial health and investor confidence.
