The pharmaceutical business is part of the larger healthcare sector. Companies in the pharmaceutical industry research, develop, manufacture, and market medicines and drugs. Pharmaceutical products may be generic, such as those used for common ailments like the flu and colds, or branded, patented drugs used for treating rare diseases including certain types of cancers. Among the best-known pharmaceutical companies are Eli Lilly & Co. (LLY) and Merck & Co. (MRK). In the trailing 12-month period, the pharmaceutical industry, as represented by the SPDR S&P Pharmaceuticals ETF (XPH), has seen a price change of 15.3%, lagging behind the S&P 500 which has gained 25.8%. All figures are as of January 11, 2020.
Below, we'll look at 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|
|Indivior PLC (IZQVF)||0.50||0.4||1.6|
|Cronos Group Inc. (CRON.TO)||8.88CAD||3.1||1.8|
|Trulieve Cannabis Corp. (TRUL.CX)||10.05||1.0||7.7|
- Indivior PLC: Headquartered in England, Indivior manufactures and processes pharmaceutical products for both human and veterinary applications. In December, the company announced a partnership with Virginia Tech to study long-term recovery in individuals with opioid use disorder.
- Cronos Group Inc.: Diversified cannabis company Cronos Group produces and distributes medical cannabis products as well as cannabis oils. In Q3 2019, Cronos Group reported net revenue of CAD$12.7 million, up 237.8% year-over-year (YOY).
- Trulieve Cannabis Corp.: Trulieve Cannabis is a holding company that, through subsidiaries, is involved in the cultivation, sale, and distribution of medical cannabis products.
Fastest Growing Pharmaceutical Stocks
These are the pharmaceutical stocks with the highest YOY earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Pharmaceutical Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Otsuka Holdings Co. Ltd. (OTSKY)||22.48||23.4||228.3|
|Trulieve Cannabis Corp. (TRUL.CX)||10.05||1.0||205.6|
|Dr. Reddy's Laboratories Ltd. (RDY)||41.06||6.8||117.2|
- Otsuka Holdings Co. Ltd.: Ostuka Holdings is a Japanese pharmaceutical conglomerate that, in addition to pharmaceuticals, produces medical devices, nutritional supplements, and a number of foods and beverages.
- Trulieve Cannabis Corp.: See company description above.
- Dr. Reddy's Laboratories Ltd.: Dr. Reddy's Laboratories is an Indian company making bulk drugs and formulations as well as pharmaceutical components for use in India and export to markets around the world. For the most recent quarter ended September 30, 2019, Dr. Reddy's Laboratories reported YOY revenue growth of 26.4%.
Pharmaceutical Stocks with the Most Momentum
These are the pharmaceutical stocks that had the highest price change the last 12 months.
|Pharmaceutical Stocks With the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Price Change (%)|
|Relmada Therapeutics Inc. (RLMD)||38.42||0.5||668.4|
|The Medicines Co. (MDCO)||84.90||7.0||335.2|
|Durect Corp. (DRRX)||2.68||0.4||332.3|
|SPDR S&P Pharmaceuticals ETF (XPH)||N/A||N/A||15.3|
|S&P 500 (SPY)||N/A||N/A||25.8|
- 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. In October 2019, Relmada Therapeutics announced promising results from a study involving REL-1017, a drug with the potential to address treatment-resistant depression.
- The Medicines Co.: The Medicines Co. is a pharmaceutical company perhaps best known for its product Angiomax, an anticoagulant commonly used throughout the world during coronary angioplasty procedures.
- Durect Corp.: Focused on chronic diseases, Durect Corp. aims to create pharmaceutical products which can take the place of multiple injection therapy and oral dosing. Durect recently revealed an unsuccessful Phase 2a clinical trial of DUR-928, a medicine designed for patients with psoriasis. Based on the results, the company announced plans to discontinue development of the drug.
Yahoo! Finance. and "SPY," Accessed Jan. 12, 2020.
Indivior PLC. "Virginia Tech and Indivior Announce New Collaboration to Study Long-Term Recovery in People with Opioid Use Disorder," Page 1. Accessed Jan. 12, 2020.
Cronos Group, Inc. "2019 - Q3 Interim Condensed Financial Statements," Page 4. Accessed Jan. 12, 2020.
Dr. Reddy's Laboratories, Ltd. "IFRS Consol Q2," Page 1. Accessed Jan. 12, 2020.
Relmada Therapeutics, Inc. "Relmada Therapeutics Announces Top-Line Results from REL-1017 Phase 2 Study in Individuals with Treatment Resistant Depression," Accessed Jan. 12, 2020.
Durect Corp. "DURECT Corporation Announces Top-Line Results from Phase 2a Clinical Trial in Patients with Psoriasis," Accessed Jan. 12, 2020.