The pharmaceutical industry is part of the larger health care sector. Companies in the pharmaceutical industry research, develop, manufacture, and market medicines and drugs. Some of the better-known companies include Johnson & Johnson (JNJ), Pfizer Inc. (PFE), and Merck & Co. Inc. (MRK). Pharmaceutical stocks, as represented by the iShares U.S. Pharmaceuticals ETF (IHE), have performed on par with the broader market over the past year. IHE has provided a total return of 13.5% over the last 12 months, slightly below the Russell 1000's total return of 13.8%, as of September 11, 2020. All statistics in the tables below are as of September 14.
Here are the top 3 pharmaceutical stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Pharmaceutical Stocks
These are the pharmaceutical stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Pharmaceutical Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Biogen Inc. (BIIB)||269.91||42.7||7.9|
|Supernus Pharmaceuticals Inc. (SUPN)||21.29||1.1||9.6|
|Sanofi SA (SNY)||51.88||130.4||10.7|
- Biogen Inc.: Biogen focuses on the discovery, development, and commercialization of pharmaceutical treatments, with a strong focus on the fields of neurology, immunology, and oncology. The company announced in July the appointment of Michael McDonnell to the roles of Executive Vice President and Chief Financial Officer (CFO). McDonnell joins the company from IQVIA Holdings Inc. (IQV) where he had similar roles.
- Supernus Pharmaceuticals Inc.: Supernus Pharmaceuticals develops and markets proprietary drugs for the treatment of central nervous system (CNS) diseases and disorders. The company announced in June that it had completed its acquisition of the CNS portfolio of U.S. WorldMeds, a privately-held biopharmaceutical company. The company said the transaction will expand its experience in CNS diseases as well as its marketing and development efforts into Parkinson's disease. The deal was for $300 million in upfront cash plus additional cash milestone payments of up to $230 million.
- Sanofi SA: Sanofi is a France-based multinational company that researches and produces pharmaceutical products. The company offers drugs, generic medicines, food supplements, cosmetics, and medical devices for a range of illnesses. Sanofi announced in mid-August plans to acquire Principia Biopharma Inc. (PRNB), a late-stage biopharmaceutical company. The deal has a total equity value of about $3.68 billion.
Fastest Growing Pharmaceutical Stocks
These are the pharmaceutical stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Pharmaceutical Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Takeda Pharmaceutical Co. Ltd. (TAK)||18.34||57.8||1,100|
|AstraZeneca PLC (AZN)||53.73||141.0||544.4|
|Perrigo Co. PLC (PRGO)||48.62||6.6||528.6|
- Takeda Pharmaceutical Co. Ltd.: Takeda is a Japan-based multinational company that researches and produces pharmaceutical drugs. The company is focused on the core therapeutic areas of oncology, gastrointestinal, and central nervous system diseases. Takeda announced last week that it was selling a portfolio of non-core prescription pharmaceutical products to German-based pharmaceutical company Cheplapharm in a deal worth approximately $562 million.
- AstraZeneca PLC: AstraZeneca is a U.K.-based multinational holding company that, through its subsidiaries, researches and manufactures pharmaceutical and medical products. It is focused on eight therapeutic areas, which are gastrointestinal, oncology, cardiovascular, respiratory, central nervous system, pain control, anaesthesia, and infection. COVID-19 trials conducted by AstraZeneca have been the target of criticism and controversy due to a myraid of safety issues in the U.S. and United Kingdom.
- Perrigo Co. PLC: Perrigo is an Ireland-based health care company offering over-the-counter consumer goods and specialty pharmaceutical products. Its products include pharmaceuticals, infant formulas, nutritional products, active pharmaceutical ingredients, and pharmaceutical and medical diagnostic products. The company posted net income growth of 573.3% on net sales growth of 6.1% in Q2 2020, which ended June 27, 2020. Net income was positively affected by lower operating expenses and lower income tax expenses.
Pharmaceutical Stocks with the Most Momentum
These are the pharmaceutical stocks that had the highest total return over the last 12 months.
|Pharmaceutical Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Neoleukin Therapeutics Inc. (NLTX)||12.17||0.5||276.8|
|Momenta Pharmaceuticals Inc. (MNTA)||52.08||6.2||269.9|
|Relmada Therapeutics Inc. (RLMD)||36.24||0.6||235.6|
|iShares US Pharmaceuticals ETF (IHE)||N/A||N/A||13.5|
- Neoleukin Therapeutics Inc.: Neoleukin Therapeutics is a biopharmaceutical company that develops medicines to treat serious diseases, including cancer, inflammatory, and autoimmune disorders.
- Momenta Pharmaceuticals Inc.: Momenta Pharmaceuticals is a biotechnology company focused on the discovery and development of novel biologic therapies for the treatment of rare immune-mediated diseases. The company announced in mid-August that it had entered into an agreement to be acquired by Johnson & Johnson in an all-cash transaction valued at $6.5 billion. The transaction is expected to close during the second half of 2020, pending satisfaction of certain conditions.
- Relmada Therapeutics Inc.: Relmada Therapeutics is a pharmaceutical company focused on the research and development of chemical entities used for the treatment of pain, as well as a line of established drugs for central nervous system diseases.
YCharts. "Financial Data." Accessed Sep. 14, 2020.
Biogen Inc. "BIOGEN NAMES MICHAEL MCDONNELL AS EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER." Accessed Sep. 14, 2020.
Supernus Pharmaceuticals Inc. "Supernus Completes Acquisition of CNS Portfolio from US WorldMeds." Accessed Sep. 14, 2020.
Supernus Pharmaceuticals Inc. "Supernus to Acquire CNS Portfolio from US WorldMeds." Accessed Sep. 14, 2020.
Sanofi SA. "Sanofi to acquire Principia Biopharma." Accessed Sep. 14, 2020.
Takeda Pharmaceutical Co. Ltd. "Takeda Divests Select Non-Core Assets in Europe to Cheplapharm for Approximately $562 million USD." Accessed Sep. 14, 2020.
New York Times. "AstraZeneca Partly Resumes Coronavirus Vaccine Trial After Halting It for Safety." Accessed Sept. 15, 2020.
Perrigo Co. PLC. "Perrigo Company plc Reports Second Quarter 2020 Financial Results." Accessed Sep. 14, 2020.
Momenta Pharmaceuticals Inc. "Momenta Enters Definitive Agreement with Johnson & Johnson." Accessed Sep. 14, 2020.