The pharmaceutical industry is part of the larger health care sector. Companies in the pharmaceutical industry research, develop, manufacture, and market medicines and drugs. The best-known pharmaceutical companies are, among others, Eli Lilly & Co. (LLY), Allergan PLC (AGN), and Pfizer Inc. (PFE). Pharmaceutical stocks, as represented by the SPDR S&P Pharmaceuticals ETF (XPH), have underperformed the broader market, posting a negative total return of 12.7% compared to the S&P 500's negative return of 9.6% over the past 12 months. These market performance numbers and the statistics in the tables below are as of March 16.
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|
|Trulieve Cannabis Corp. (TRUL)||CA$9.36||CA$1.0||5.5|
|Cronos Group Inc. (CRON.TO)||CA$7.29||CA$2.5||6.3|
|Supernus Pharmaceuticals Inc. (SUPN)||16.36||0.9||7.8|
- Trulieve Cannabis Corp.: Trulieve Cannabis is a Canada-based holding company that, through its subsidiaries, engages in the cultivation, possession, sale, and distribution of medical cannabis.
- Cronos Group Inc.: Cronos Group is a Canada-based diversified cannabis company that produces and distributes medical cannabis products as well as cannabis oils.
- Supernus Pharmaceuticals Inc.: Supernus Pharmaceuticals develops and markets proprietary drugs for the treatment of central nervous system diseases and disorders.
Fastest Growing Pharmaceutical Stocks
These are the pharmaceutical stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Pharmaceutical Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Gilead Sciences Inc. (GILD)||70.75||89.4||91,710|
|Horizon Therapeutics PLC (HZNP)||29.04||5.5||468.0|
|Trulieve Cannabis Corp. (TRUL)||CA$9.36||CA$1.0||208.7|
- Gilead Sciences Inc.: Gilead Sciences makes drugs for the treatment of human immunodeficiency virus (HIV), liver disease, respiratory diseases, and other ailments. The company announced earlier in March that it has agreed to acquire Forty Seven Inc. (FTSV) for $4.9 billion. The deal is expected to close sometime during the second quarter of 2020.
- Horizon Therapeutics PLC: Horizon Therapeutics is an Ireland-based biopharmaceutical company that researches, develops, and markets late-stage biopharmaceutical therapies for the treatment of pain, inflammation, orphan diseases, and other illnesses. The company announced in January that it had received approval from the U.S. Food and Drug Administration (FDA) for its drug TEPEZZATM, which treats Thyroid Eye Disease (TED). It is the first and only FDA-approved medicine used in the treatment of TED.
- Trulieve Cannabis Corp.: See above for company description.
Pharmaceutical Stocks with the Most Momentum
These are the pharmaceutical stocks that had the highest total return over the last 12 months.
|Pharmaceutical Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Relmada Therapeutics Inc. (RLMD)||30.94||0.5||325.0|
|Momenta Pharmaceuticals Inc. (MNTA)||28.65||3.4||101.9|
|Zoetis Inc. (ZTS)||125.48||59.6||30.2|
|S&P 500 (SPY)||N/A||N/A||-9.6|
|SPDR S&P Pharmaceuticals ETF (XPH)||N/A||N/A||-12.7|
- 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. The company announced earlier in March that Thomas C. Wessel, M.D. and Ph.D., has been appointed to the roles of Executive Vice President and Head of Research and Development. He will lead all clinical development and regulatory activities for Relmada.
- 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 early January that, as part of its consolidation of key financial and business functions, Young Kwon, Ph.D., Momenta's Chief Business Officer, has been appointed to the role of Chief Financial and Business Officer.
- Zoetis Inc.: Zoetis discovers, develops, and manufactures animal health medicines and vaccines, with a focus on livestock and companion animals. The company announced in February that the FDA has approved Simparica TrioTM, a drug used to prevent parasites in dogs.
YCharts. "Financial Data," Accessed Mar. 16, 2020.
Gilead Sciences Inc. "Gilead to Acquire Forty Seven for $4.9 Billion," Accessed Mar. 16, 2020.
Horizon Therapeutics PLC. "FDA Approves TEPEZZA (TM) (teprotumumab-trbw) for the Treatment of Thyroid Eye Disease (TED)," Accessed Mar. 16, 2020.
Reload Therapeutics Inc. "Relmada Therapeutics Appoints CNS Specialist Thomas C. Wessel, M.D., Ph.D., as Executive Vice President, Head of Research and Development," Accessed Mar. 16, 2020.
Momenta Pharmaceuticals Inc. "Momenta Pharmaceuticals Announces CFO Transition," Accessed Mar. 16, 2020.
Zoetis Inc. "Zoetis Receives FDA Approval for Simparica Trio™, A New Combination Parasite Preventative for Dogs," Accessed Mar. 16, 2020.