The pharmaceutical market is a critical part of the healthcare industry. It contributes largely to research, development, production and distribution of important life-saving vaccines and medications.
As the global healthcare system, quality of life and average life expectancy continue to improve, the need for research and development of these critical medications and treatments are also on the rise.
A large number of healthcare companies rely on trials, which makes it difficult to predict the company’s future performance, as they require FDA approval.
This also means that when a pharmaceutical company develops a groundbreaking vaccine or medication like that of Covid-19 vaccines during the pandemic, the company will experience an unprecedented growth.
Conversely, when their trials fail or their treatments do not get approved, pharmaceutical companies tend to see sharp declines in stock price. Thus, it is extremely important for investors to do prior research and only buy pharmaceutical companies with high potential in their pipeline.
Below are the three pharma stocks investors should buy now or they will regret forever.
Pfizer (PFE)
Pfizer (NYSE:PFE) is an American pharmaceutical giant that has made its name known to the entire world for developing the first vaccine against Covid-19. However, that was 2021. Since its peak, Pfizer’s stock has more than halved, making it a typical bell-shaped curve.
While Pfizer’s growth has been undoubtedly slowed by post-pandemic Covid-19 vaccine sales — and revenues reflect that — Pfizer still offers a healthy dividend yield at 6%. There are indications that this might be a perfect time to buy Pfizer.
As a company, Pfizer has been preparing for the post-pandemic phase, looking for other ways to keep up their revenue other than Covid-19 vaccine sales. For instance, as of May 1, 2024, Pfizer has 113 pipeline vaccines with 37 of them in the final phase and 3 under registration.
In areas like mRNA and precision medicine, Pfizer is still ahead of its competitions. We do not know for certain when Pfizer will make its comeback, but one thing is for sure, it is on the way.
GSK (GSK)
GSK (LON:GSK) is a London-based pharmaceutical company. Back in April 2024, the U.S. Food and Drug Administration approved GSK’s request for priority review on application for supplemental Biologics License Application for Jemperli with standard chemotherapy.
This action would further expand treatment to all adult patients that have recurrent endometrial cancer. The FDA announced that the decision will be made sometime in August.
This is huge news for GSK, especially considering that its Jemperli could be the next blockbuster. GSK’s Jemperli has been tested further since then.
Just a few weeks ago, the British pharma announced that 42 patients with rectal cancer took the GSK biologic and became cancer-free. Positive news like this contributes to the growing expectation that GSK’s Jemperli might soon become the first ever approved treatment for patients with rectal cancer.
Annually, there are over 400,000 new cases of endometrial cancer, and if approved in August, this could skyrocket GSK’s stock.
Bristol-Myers Squibb (BMY)
Bristol-Myers Squibb (NYSE:BMY) is another American pharmaceutical company that consistently makes the top pharma list and Fortune 500 list. The pharma also offers a solid dividend yield of 5.58%, and the company has increased dividend rate for the past 16 consecutive years.
Currently, the Bristol-Myers Squibb stock is at its historic low, closing at $42.19 compared to its peak price at $81.13 just about a year and a half ago.
On the other hand, there are some positives that make up for this potential concern. It has a 15% trailing free cash flow yield as well as a 6 times forward earnings. This gives Bristol-Myers Squibb an incredible comeback potential.
One of the major challenges with Bristol-Myers Squibb is that the company will face patent expirations. However, Bristol-Myers Squibb is specifically dominating in the field of oncology, where the majority of its pipeline is categorized.
With a compound annual growth rate at almost 10%, the oncology sector will provide Bristol-Myers Squibb with a huge growth potential.
On the date of publication, Andy Kim did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
