The stocks of pharmaceutical companies are termed as Pharma stocks. With the rapid growth and advancement in science and technology when it comes to the medical field, Pharma companies and their stocks have become one of the most attractive opportunities for investment.
The pharmaceutical sector is a sub-sector under the healthcare sector. It is specifically related to researching, developing, manufacturing, and selling of medicines and drugs. The drugs and medicines can be generic or directed towards specific ailments. Overall, global sales for the top ten therapeutic areas in the Pharma sector reached $36 billion in 2018.
Therefore, Pharma stocks are significant high-risk high-reward avenues of investment for investors looking for both long-term gains and short-term dividend payments.
|JNJ||Johnson & Johnson||$158.55||-11.32%||381.7B|
|MRK||Merck & Co., Inc.||$106.23||-3.44%||269.2B|
|LLY||Eli Lilly and Company||$588.15||59.27%||558.3B|
|BMY||Bristol-Myers Squibb Company||$50.23||-37.76%||102.2B|
|GILD||Gilead Sciences, Inc.||$79.02||-10.18%||98.5B|
|GWPH||GW Pharmaceuticals plc||#N/A||#N/A||#N/A|
|HCM||Hutchison China MediTech Limited||$17.83||30.05%||3.1B|
|HRTX||Heron Therapeutics, Inc.||$1.45||-42.91%||217.6M|
|AERI||Aerie Pharmaceuticals, Inc.||$0.74||-25.25%||248.3M|
|TEVA||Teva Pharmaceutical Industries Limited||$10.06||16.71%||11.1B|
|CGC||Canopy Growth Corporation||$0.67||-84.49%||661.2M|
|RDY||Dr. Reddy's Laboratories Limited||$69.76||27.32%||959.7B|
|ACB||Aurora Cannabis Inc.||$0.48||-64.71%||309.7M|
|TARO||Taro Pharmaceutical Industries Ltd.||$36.65||20.84%||1.4B|
|ENDP||Endo International plc||$2,108.45||#N/A||#N/A|
|TAK||Takeda Pharmaceutical Company Limited||$13.97||-4.05%||6543.2B|
|ELAN||Elanco Animal Health Incorporated||$12.86||0.08%||6.3B|
|HZNP||Horizon Therapeutics Public Limited Company||#N/A||#N/A||#N/A|
|PCRX||Pacira BioSciences, Inc.||$28.69||-38.63%||1.3B|
|IRWD||Ironwood Pharmaceuticals, Inc.||$10.35||-13.75%||1.6B|
|SUPN||Supernus Pharmaceuticals, Inc.||$27.78||-21.99%||1.5B|
Examples of Pharma Stocks
Pharmaceutical companies are known for their steady revenue streams, high profit margins, and strong growth prospects. These factors make them attractive investments for those looking to add some stability to their portfolio.
Here are some of the best pharmaceutical stocks to consider:
- Johnson & Johnson (JNJ) – Johnson & Johnson is one of the largest and most diversified healthcare companies in the world. The company operates in three segments: consumer, medical devices, and pharmaceuticals. It is a leader in the development of new drugs, with a strong pipeline of potential treatments for cancer, diabetes, and other diseases.
- Pfizer Inc. (PFE) – Pfizer is one of the largest pharmaceutical companies in the world, with a market capitalization of over $200 billion. The company has a strong portfolio of drugs, including the successful Lipitor (cholesterol) and Viagra (erectile dysfunction) brands. It also has a robust pipeline of new drugs in development.
- Merck & Co., Inc. (MRK) – Merck is a large pharmaceutical company that specializes in developing drugs for the treatment of cancer, diabetes, and other chronic diseases. The company has a strong pipeline of new drugs in development, including a promising cancer immunotherapy treatment called Keytruda.
- Gilead Sciences, Inc. (GILD) – Gilead Sciences is a biopharmaceutical company that specializes in the development of drugs for the treatment of HIV, hepatitis B, and other viral diseases. The company has a strong pipeline of new drugs in development, including a potential cure for HIV.
- Bristol-Myers Squibb Co (BMY) – Bristol-Myers Squibb is a large pharmaceutical company that specializes in the development of drugs for the treatment of cancer, heart disease, and other chronic diseases. The company has a strong pipeline of new drugs in development, including a promising cancer immunotherapy treatment called Opdivo.
About the Pharma Industry
The pharmaceutical industry, also known as the “pharma industry,” is a highly-innovative and rapidly-evolving sector that is responsible for the research, development, manufacturing, and marketing of drugs and other medicinal products. The industry plays a critical role in improving public health by developing treatments for a wide range of diseases and conditions.
One of the key drivers of the pharmaceutical industry is the constant need for new and improved treatments. As medical knowledge and technology continue to advance, there is a growing demand for more effective and targeted therapies to treat an increasing number of conditions. Additionally, the aging population and the growing prevalence of chronic diseases have also led to an increase in demand for pharmaceutical products.
The pharmaceutical industry can be broadly divided into two segments: the research-based pharmaceutical companies and the generic pharmaceutical companies. The research-based companies are responsible for the majority of drug development and innovation within the industry. They invest heavily in researching and developing new drugs, often spending billions of dollars and several years on the process. Generic pharmaceutical companies, on the other hand, typically produce lower-cost versions of drugs that have already been developed and are no longer protected by patents.
The pharmaceutical industry is highly regulated, with strict guidelines in place to ensure the safety and efficacy of drugs. The FDA (Food and Drug Administration) in the United States and the EMA (European Medicines Agency) in the European Union are two examples of regulatory bodies that oversee the industry. The pharmaceutical industry is also a major contributor to the global economy, generating billions of dollars in revenue each year.
In recent years, there has been a growing focus on the high cost of drugs, particularly in the United States, and the need for more affordable treatments. Additionally, there is a growing demand for more personalized medicine, where treatments are tailored to the individual patient’s genetic makeup.
In summary, the pharmaceutical industry plays a critical role in improving public health and is constantly evolving to meet the changing needs of patients. However, it is also a highly-regulated and expensive industry, with a focus on the high cost of drugs.
Factors to Consider Before Investing in Pharma Stocks
The most critical factor to consider before investing in Pharma stocks is that the success or failure of any Pharma company and its stock relies on the success or failure of its drugs. Every drug needs to be approved by the US Food and Drug Administration (FDA) before it becomes commercially available.
Therefore, investors must perform extensive research before investing in Pharma stocks, especially at the clinical trial stage. The clinical trial stage is what makes or breaks a Pharma company and its stock. Successful clinical trials lead to colossal market gains while the failures hold the potential to wreck the entire company in one go.
Pharma stocks are highly volatile and are subject to very high risks. However, for investors open to taking big risks, Pharma stocks can generate massive returns if the risks pay off well.
Which Pharma Stocks Should I Buy?
Numerous Pharma stocks trade on the US stock exchanges. Among the top-performing Pharma stocks, we have compiled a list of the best Pharma stocks for you to select from.
Investors can invest in well-established Pharma companies that have stable track records of successful clinical trials, innovations, and continuous research & development. At the same time, investors can also invest in Pharma stocks of small and new entrants to the market that holds strong potential to disrupt the market with their innovations and novelty.