The pharmaceutical industry is part of the larger healthcare 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 underperformed the broader market over the past year. IHE has provided a total return of 16.3% over the last 12 months, below the Russell 1000's total return of 21.9%, as of December 2, 2020. All statistics in the tables below are as of December 3.
Here are the top 3 pharmaceutical stocks with the best value, the fastest 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)||246.92||38.0||8.2|
|Supernus Pharmaceuticals Inc. (SUPN)||21.67||1.1||9.0|
|Amneal Pharmaceuticals Inc. (AMRX)||4.04||0.6||9.9|
- 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.
- Supernus Pharmaceuticals Inc.: Supernus Pharmaceuticals develops and markets proprietary drugs for the treatment of central nervous system diseases and disorders. The company announced in early October the appointment of James Kelly to the role of Chief Financial Officer (CFO), replacing Greg Patrick, who is retiring. Mr. Kelly most recently served as CFO and Treasurer at Vanda Pharmaceuticals Inc. (VNDA).
- Amneal Pharmaceuticals Inc.: Amneal Pharmaceuticals specializes in the development and manufacture of generic and biosimilar pharmaceutical products. The company posted a net loss of $22.0 million as net revenue rose 37.3% in Q3 2020, which ended September 30, 2020. The net loss was a significant improvement from the net loss of $363.4 million reported in the year-ago quarter.
Fastest Growing Pharmaceutical Stocks
These are the pharmaceutical stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Pharmaceutical Stocks|
|Market Cap ($B)||EPS Growth (%)|
|Horizon Therapeutics PLC (HZNP)||69.54||15.4||1,360|
|Phibro Animal Health Corp. (PAHC)||18.39||0.7||400.0|
|Amphastar Pharmaceuticals Inc. (AMPH)||17.82||0.8||166.7|
- Horizon Therapeutics PLC: Horizon Therapeutics is an Ireland-based biopharmaceutical company that researches, develops, and markets late-stage biopharmaceutical therapies for the treatment of pain, inflammation, orphan diseases, and other illnesses. The company said it achieved record results in Q3 2020, which ended September 30, 2020. Net income rose 1,506.0% on net sales growth of 89.7% compared to the year-ago quarter. Sales growth outpaced the rise in costs and expenses, helping to significantly boost net income.
- Phibro Animal Health Corp.: Phibro Animal Health is a global animal health and mineral nutrition company. It offers various products including antibacterials, anticoccidials, vaccines, nutritional specialty products, and mineral nutrition products for the treatment of animals.
- Amphastar Pharmaceuticals Inc.: Amphastar Pharmaceuticals is a specialty pharmaceutical company that develops and manufactures generic, proprietary injectable, inhalation, and intranasal pharmaceutical products.
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 (%)|
|IM Cannabis Corp. (IMCC.CX)||CA$2.15||CA$341.1||437.5|
|TerrAscend Corp. (TER.CX)||CA$12.65||CA$939.6||282.2|
|Planet 13 Holdings Inc. (PLTH.CX)||CA$6.41||CA$760.1||212.7|
|iShares U.S. Pharmaceuticals ETF (IHE)||N/A||N/A||16.3|
- IM Cannabis Corp.: IM Cannabis is a medical cannabis company. It offers a wide variety of government-licensed cannabis products, including generic and pharmaceutical-grade products for both wholesale and retail clients. The company was formed in Canada and has a head office in Israel.
- TerrAscend Corp.: TerrAscend is a Canada-based integrated cannabis company focused on medical cannabis research, development, devices, and delivery systems. The company announced in early November that it has entered into an agreement to acquire HMS Health LLC and HMS Processing LMC (collectively known as "HMS") from Curaleaf Holdings Inc. (CURA) for $27.5 million. HMS is a Maryland-based cultivator and processor of medical cannabis products. The transaction is expected to close in the first quarter of 2021.
- Planet 13 Holdings Inc.: Planet 13 is a holding company that, through its subsidiaries, develops cannabis-based products. The company's products include cannabis, cannabis extracts, infused products, vapes, edibles, and more.
The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
YCharts. "Financial Data." Accessed Dec. 3, 2020.
Supernus Pharmaceuticals Inc. "Supernus Pharmaceuticals Appoints James Kelly as Chief Financial Officer." Accessed Dec. 5, 2020.
Amneal Pharmaceuticals Inc. "Amneal Reports Third Quarter 2020 Financial Results." Accessed Dec. 5, 2020.
Horizon Therapeutics PLC. "Horizon Therapeutics plc Reports Record Third-Quarter 2020 Results; Increases TEPEZZA® Full-Year Net Sales Guidance to Greater Than $800 Million; Increases Full-Year 2020 Net Sales and Adjusted EBITDA Guidance." Accessed Dec. 5, 2020.
TerrAscend Corp. "TerrAscend Expands U.S. Footprint Via Acquisition of Maryland Based Grower Processor." Accessed Dec. 5, 2020.