Rafael Holdings, Inc. (NYSE:RFL) is a company involved in the development and commercialization of novel cancer therapies. It operates in a competitive landscape alongside other biotechnology firms such as Scholar Rock Holding Corporation, Evelo Biosciences, Verrica Pharmaceuticals, and Replimune Group. These companies are all focused on innovative treatments, making capital efficiency a critical factor in their operations.
Rafael Holdings has a Return on Invested Capital (ROIC) of -136.01%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 9.36%. This indicates that the company is not generating sufficient returns to cover its cost of capital, leading to a negative ROIC to WACC ratio of -14.52. This suggests inefficiency in how Rafael Holdings utilizes its capital.
In comparison, Scholar Rock Holding Corporation (SRRK) has a ROIC of -58.24% and a WACC of 6.79%, resulting in a ROIC to WACC ratio of -8.58. Although still negative, Scholar Rock's ratio is less severe than Rafael Holdings, indicating relatively better capital utilization.
Evelo Biosciences, Inc. (EVLO) presents a more challenging scenario with a ROIC of -201.37% against a WACC of 9.04%, leading to a ROIC to WACC ratio of -22.28. This highlights significant inefficiencies in capital use, even more so than Rafael Holdings.
Replimune Group, Inc. (REPL) emerges as the most efficient among the peers, with a ROIC of -43.17% and a WACC of 9.57%, resulting in a ROIC to WACC ratio of -4.51. Despite being negative, this ratio is the least negative, suggesting that Replimune is relatively more efficient in capital utilization compared to its peers.
