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), Eli Lilly & Co. (LLY), and Merck & Co. Inc. (MRK). Pharmaceutical stocks, as represented by the SPDR S&P Pharmaceuticals ETF (XPH), have performed on par with the broader market, providing investors with a total return of 14.7% compared to the S&P 500's total return of 14.3% over the past 12 months. These market performance numbers and the statistics in the tables below are as of June 10.
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|
|Cronos Group Inc. (CRON.TO)||CA$10.07||CA$3.5||8.2|
|Trulieve Cannabis Corp. (TRUL.CX)||CA$17.72||CA$2.0||8.7|
|Biogen Inc. (BIIB)||293.74||47.9||9.1|
- Cronos Group Inc.: Cronos Group is a Canada-based diversified cannabis company that produces and distributes medical cannabis products as well as cannabis oils. The company posted net revenue growth of 180.7% for Q1 2020, which ended March 31, 2020. Cronos Group also noted that its distribution channels continue to see disruptions related to the COVID-19 pandemic.
- Trulieve Cannabis Corp.: Trulieve Cannabis is a Canada-based holding company that, through its subsidiaries, engages in the cultivation, possession, sale, and distribution of medical cannabis. The company announced at the end of April the appointment of Alex D'Amico to the role of Chief Financial Officer (CFO).
- Biogen Inc.: Biogen focuses on the discovery, development, and commercialization of pharmaceutical treatments, with a strong focus on the fields of neurology, immunology, and oncology.
Fastest Growing Pharmaceutical Stocks
These are the pharmaceutical stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Pharmaceutical Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Amphastar Pharmaceuticals Inc. (AMPH)||20.54||0.9||300.0|
|GlaxoSmithKline PLC (GSK)||41.88||105.1||83.8|
|Dr. Reddy's Laboratories Ltd. (RDY)||54.65||9.1||70.8|
- Amphastar Pharmaceuticals Inc.: Amphastar Pharmaceuticals is a specialty pharmaceutical company that develops and manufactures generic, proprietary injectable, inhalation, and intranasal pharmaceutical products. The company posted net revenue growth of 6.1% for Q1 FY 2020, which ended March 31, 2020. Amphastar said that its business was not significantly impacted by the coronavirus pandemic, but added that it would not be possible to estimate any future impacts due to the uncertain nature of the crisis.
- GlaxoSmithKline PLC: GlaxoSmithKline is a U.K.-based pharmaceutical company that develops, manufactures, and markets vaccines, prescriptions and over-the-counter medicines, and health-related consumer products.
- Dr. Reddy's Laboratories Ltd.: Dr. Reddy's Laboratories is an India-based pharmaceutical company that manufactures bulk drugs, prescription and over-the-counter pharmaceutical products, as well as differentiated formulations and new chemical entities. The company recently announced that it had completed its acquisition of select divisions of Wockhardt Ltd.'s branded generics business in India and several other international territories. Wockhardt is comprised of a portfolio of dozens of brands in a range of therapy areas, including respiratory, neurology, dermatology, and more.
Pharmaceutical Stocks with the Most Momentum
These are the pharmaceutical stocks that had the highest total return over the last 12 months.
|Pharmaceutical Stocks with the Most Momentum|
|Price ($)||Market Cap ($M)||12-Month Trailing Total Return (%)|
|Neoleukin Therapeutics Inc. (NLTX)||14.95||575.4||528.2|
|Durect Corp. (DRRX)||2.52||494.0||387.6|
|Relmada Therapeutics Inc. (RLMD)||48.49||737.0||342.4|
|SPDR S&P Pharmaceuticals ETF (XPH)||N/A||N/A||14.7|
- Neoleukin Therapeutics Inc.: Neoleukin Therapeutics is a biopharmaceutical company that develops medicines to treat serious diseases, including cancer, inflammatory, and autoimmune disorders. The company announced in late February the appointment of Robert K. Ho to the role of CFO.
- Durect Corp.: Durect is a pharmaceutical company focused on chronic diseases. The company aims to create pharmaceutical products which can take the place of multiple injection therapy and oral dosing. Durect posted a 32.8% decline in revenue during Q1 FY 2020, which ended March 31, 2020.
- 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 Jun. 10, 2020.
Cronos Group Inc. "Cronos Group Reports 2020 First Quarter Results," Accessed Jun. 10, 2020.
Trulieve Cannabis Corp. "Trulieve Announces the Appointment of Alex D'Amico as Chief Financial Officer," Accessed Jun. 10, 2020.
Amphastar Pharmaceuticals Inc. "Amphastar Pharmaceuticals Reports Financial Results for the Three Months Ended March 31, 2020," Accessed Jun. 10, 2020.
Dr. Reddy's Laboratories Ltd. "Dr. Reddy’s Laboratories completes the acquisition of select business divisions of Wockhardt," Accessed Jun. 10, 2020.
Neoleukin Therapeutics Inc. "Neoleukin Therapeutics Announces Appointment of Robert K. Ho as Chief Financial Officer," Accessed Jun. 10, 2020.
Durect Corp. "DURECT Corporation Announces First Quarter 2020 Financial Results and Update of Programs," Accessed Jun. 10, 2020.