The pharmaceutical industry is made of companies that research, develop, make, and sell drugs and treatments used to treat or eradicate diseases, and vaccinate people. This includes some of the largest and best-known companies in the world, such as Pfizer Inc. (PFE), Merck & Co. Inc. (MRK), and AbbVie Inc. (ABBV). A number of pharmaceutical companies, including Pfizer, have seen a surge in their sales after winning approval from U.S. and foreign governments for vaccines aimed at preventing the COVID-19 virus.
Over the last 12 months, pharmaceutical stocks, based on the iShares U.S. Pharmaceuticals ETF (IHE), have lagged behind the overall market. IHE's total return over the period was 29.7% compared to the Russell 1000's 48.3% return. The latter's performance is as of March 10, and the IHE's total return and statistics in the tables below are as of March 11.
Here are the top 3 pharmaceutical stocks with the best value, the fastest growth, and the most momentum.
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|
|Amneal Pharmaceuticals Inc. ( AMRX)||5.91||0.9||9.5|
|Endo International PLC ( ENDP)||8.08||1.9||10.2|
|Sanofi SA ( SNY)||47.95||119.8||10.5|
- Amneal Pharmaceuticals Inc.: Amneal Pharmaceuticals specializes in the development and manufacture of generic and biosimilar pharmaceutical products. In Q4 2020, the company's loss narrowed sharply to $3.0 million compared to $32.1 in the same quarter a year earlier. Revenue rose by 28.4% year-over-year (YOY). Amneal's improving revenue was primarily driven by the acquisition of a majority interest in AvKARE Inc. in early 2020, and also by new product launches.
- Endo International PLC.: Endo International is an Ireland-headquartered pharmaceutical company that produces branded and generic drugs. Its branded portfolio includes treatments for urology, orthopedic/pediatric endocrinology, and pain management. Its generics division encompasses 135 product families, and it also sells a wide range of sterile injectable products.
- Sanofi SA.: Sanofi, based in France, owns pharmaceutical, vaccines, and consumer healthcare businesses. Its products treat a wide range of diseases, including rheumatoid arthritis, cancer, diabetes, cardiovascular diseases, and rare blood disorders. Its consumer healthcare division provides over-the-counter products.
These are the pharmaceutical stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Pharmaceutical Stocks|
|Market Cap ($B)||EPS Growth (%)|
|PPD Inc. ( PPD)||35.73||12.5||903.3|
|Eagle Pharmaceuticals Inc. ( EGRX)||44.82||0.6||742.9|
|Emergent BioSolutions Inc. ( EBS)||89.63||4.8||286.5|
- PPD Inc.: PPD is a contract research organization (CRO) that provides development services to pharmaceutical, biotechnology, medical device, and government organizations to bring drugs to market faster. It also provides laboratory services. In Q4 2020, PPD's net income attributable to common shareholders was $73.1 million, up more than ten-fold from the same quarter a year earlier. The earnings increase stemmed partly from a $36.1 million gain on the sale of investments. Revenue increased by 30.3% YOY.
- Eagle Pharmaceuticals Inc.: Eagle Pharmaceuticals has several products, including Ryanodex (muscle relaxant), Bendeka (chemotherapy to treat certain leukemia), and Belrapzo (certain non-Hodgkin lymphoma). Its Q4 2020 net income was $8.1 million, eight times the year-ago figure, on a 3% YOY increase in revenue. The earnings jump was fueled by the fruits of a broad range of cost-containment actions precipitated by COVID-19. This included lower selling, general, and administrative expenses due to reduced legal costs, and a cut in travel-related expenses.
- Emergent BioSolutions Inc.: Emergent BioSolutions sells major products such as anthrax vaccines, NARCAN Nasal Spray (opioid overdose), and ACAM2000 (smallpox vaccine). The company's Q4 2020 profit nearly quadrupled from a year ago as revenue rose by 61.8% YOY. The gains were largely fueled by expanded contract development and manufacturing services.
These are the pharmaceutical stocks that had the highest total return over the last 12 months.
|Pharmaceutical Stocks with the Most Momentum|
|Price ($)||Market Cap ($M)||12-Month Trailing Total Return (%)|
|Mountain Valley MD Holdings Inc. ( MVMD.CX)||CA$1.64||CA$460.0||1,950|
|Clean Power Capital Corp. ( MOVE.CX)||CA$1.89||CA$437.8||1,250|
|Zomedica Corp. ( ZOM)||1.98||1,925.0||680.1|
|iShares U.S. Pharmaceuticals ETF (IHE)||N/A||N/A||29.7|
- Mountain Valley MD Holdings Inc.: Mountain Valley MD Holdings, headquartered in Vancouver, Canada, is a biotech company with a patented Quicksome oral delivery formulations that have various applications that include vaccines, and drugs used to treat areas such as pain management, weight loss, focus issues, and anxiety.
- Clean Power Capital Corp.: Clean Power Capital, based in Vancouver, Canada, is a venture capital firm that invests in various sectors, This includes biomedical, pharmaceutical, and naturopathic sectors, including medicinal or recreational cannabis.
- Zomedica Corp.: Zomedica is a veterinary diagnostic company that aims to produce products to treat animals, although it has none on the market. Its main focus is on receiving government approval for Truforma, which launches at the end of March and is designed to detect thyroid disorders in dogs and cats. In January, the stock regained compliance with NYSE American listing requirements after the exchange said that Zomedica had "resolved the continued listing deficiency with respect to low selling price." The exchange cited the deficiency in a letter to the company in April of 2020.
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YCharts. "Financial Data." Accessed Dec. 3, 2020.
Amneal Pharmaceuticals Inc. "Amneal Reports Fourth Quarter and Full Year 2020 Financial Results," Page 1, 5. Accessed March 12, 2020.
PPD Inc. "PPD Reports Fourth Quarter and Full Year 2020 Results," Page 7. Accessed March 12, 2021.
Eagle Pharmaceuticals Inc. "Eagle Pharmaceuticals Reports Fourth Quarter and Full Year 2020 Results and Provides Pipeline Review." Accessed March 14, 2021.
Emergent BioSolutions Inc. "Emergent BioSolutions Reports Financial Results For Fourth Quarter and Full Year 2020," Page 10. Accessed March 12, 2021.
Zomedica Corp. "Zomedica Regains Listing Compliance." Accessed March 14, 2021.