Pharmaceutical Stocks

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Contributor, Benzinga
February 28, 2024


Founded in 2013 as a spinoff of Abbott Laboratories (NYSE: ABT), AbbVie quickly established itself as one of the most dominant pharmaceutical stocks. While the company it spun off from was once among the best stocks under $5, ABBV never closed in single-digit territory. While AbbVie largely stayed out of the COVID fray, investors should keep an eye on its Botox business, which may rise in value as people continue to get out of quarantine.

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Vol / Avg.2.313M / 5.404MMkt Cap313.805B
Day Range176.895 - 179.86052 Wk Range130.960 - 179.790

Eli Lilly and Co (NYSE:LLY)

An organization with a rich history, Eli Lilly is a pharmaceutical icon. In 1876, Colonel Eli Lilly, a veteran of the Civil War, founded the company that bears his name. Today, it’s one of the most recognized players in the broader life sciences industry. During the pandemic, Eli Lilly focused on neutralizing antibody treatments, with clinical data demonstrating encouraging results. This acumen may prove particularly useful in future outbreaks.

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Vol / Avg.1.781M / 3.189MMkt Cap718.410B
Day Range751.660 - 763.00052 Wk Range309.200 - 794.470

Pfizer (NYSE:PFE)

Easily one of the biggest winners of the COVID-19 vaccine wars, Pfizer initially had a mountain to climb. Prior to the Food and Drug Administration granting emergency use authorization for its messenger-RNA vaccine, the regulatory agency never approved nucleic-acid-based vaccines. Because Pfizer and rival mRNA vaccine developer Moderna proved the viability of nucleic-acid solutions, this approach could represent the benchmark on how to handle future infectious diseases.

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Vol / Avg.19.116M / 46.911MMkt Cap153.479B
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AstraZeneca (NASDAQ:AZN)

Although AstraZeneca received bad press because a few patients suffered blood clots related to its COVID vaccine, from a scientific perspective, the underlying viral vector approach is fascinating. Using an adenovirus to transmit the “recipe” for SARS-CoV-2 antibody production, viral vectors actually form the basis of gene therapy. Therefore, the coronavirus proving grounds could be extremely useful for the development of next-generation therapeutics.

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Vol / Avg.3.946M / 6.456MMkt Cap202.408B
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Johnson & Johnson (NYSE:JNJ)

Like AstraZeneca, Johnson & Johnson also deployed a viral vector approach for its COVID vaccine and similarly suffered negative press due to rare but newsworthy blood clot cases. Still, JNJ offers a critical advantage over most other vaccines: It’s a one-and-done jab. Given the logistical hurdles that lesser healthcare infrastructures must overcome, a one-shot approach offers benefits that governmental administrators cannot ignore.

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Vol / Avg.3.297M / 7.256MMkt Cap387.649B
Day Range160.290 - 161.32052 Wk Range144.950 - 175.970

While technology is sometimes a hit-or-miss affair, particularly with the intrusions of innovation occasionally outweighing its conveniences, the best pharmaceutical stocks typically enjoy universal respect, if not reverence. Over the last several years, advancements in medicine have delivered incredible solutions that were unthinkable in prior generations.

If you doubted the pertinence of the pharmaceutical industry, that notion came to a shattering end with the COVID-19 pandemic. Despite the immeasurable pain of this crisis, one indisputable bright spot was the international community marshaling its resources to produce multiple vaccines. Below are some of the best pharmaceutical stocks to consider.

Quick Look at the Best Pharmaceutical Stocks:

Overview: Pharmaceutical Stocks

Unlike other market segments, the fundamental roots of pharmaceutical stocks extend to the dawn of human civilization. From Greek legends to ancient Egyptian history, you can find ample evidence of the use of medicine to heal the afflicted. However, what society typically considers the pharmaceutical industry came to prominence following World War II, with pharmacy becoming a much more specialized and focused discipline.

Today, pharmaceutical stocks are tied to several treatment specialties that cover the four main category of diseases: infectious, hereditary, deficiency and physiological. While most people are familiar with the pharmaceutical industry’s impact on infectious diseases, advancements in this field have sparked exciting possibilities everywhere. For instance, continuous glucose monitors allow patients with diabetes — a physiological disease — to enjoy life without constant finger pricking.

And while the COVID-19 pandemic is unquestionably a sorrowful human tragedy, if a silver lining exists, it would be the development of unprecedented solutions, especially the manufacturing and distribution of nucleic-acid-based vaccines to impart mass-scale immunogenicity. Pre-COVID, vaccine development was a complex process that typically took 10 to 15 years. Under Operation Warp Speed, the Trump administration helped push a solution in a matter of months.

Though an uncomfortable topic, the response to the novel coronavirus was a necessary victory for pharmaceutical stocks. As epidemiologists note, COVID-19 wasn’t the first pandemic, nor will it be the last. But thanks to the baptism of fire that the pharmaceutical industry overcame, it is much better prepared to deal with another inevitable public health crisis.

Best Online Brokers for Pharmaceutical Stocks

Most financial analysts will agree that the best pharmaceutical stocks offer indelible relevance for your portfolio. As an example, picking out the most viable consumer discretionary stock is a risky endeavor because tastes change. Also, demographic shifts can impose variability into your analysis. However, pharmaceutical-based investments are no-brainers: Everybody wants to live long, healthy lives.

That said, this sector is wildly diverse. From multibillion-dollar revenue machines to speculative startups banking on the clinical results of a single therapeutic, you will not find a “typical” pharmaceutical stock. Each is different, meaning that if you’re primarily interested in this space, you will want a brokerage that can effortlessly accommodate various segments, ranging from major exchanges to over-the-counter markets to derivatives such as options contracts.

Below is a list of best online brokers for pharmaceutical stocks.

Features to Look for in Pharmaceutical Stocks

  1. Compelling pipeline: Given their underlying companies’ potential to forward lifesaving therapies and devices, many pharmaceutical stocks tend to have a feel-good aura about them. Nevertheless, competition within the sector is extremely fierce, belying such outward appearances. From an investment perspective, the best stocks in this hyper-competitive arena are tied to unique and compelling product pipelines. Without something extraordinary, it’s very difficult to stand out in this market.
  2. Solid track record: One of the common pitfalls of investing in pharmaceutical plays is that they tend to move heavily on significant news items, such as disclosures about earnings per share or pipeline-related clinical results. This is a double-edged sword, with positive data sparking intense rallies while not-so-pleasant revelations leading to soul-crushing volatility. However, the best pharmaceutical stocks will have a solid track record in terms of market performance.
  3. Financial stability: The life of a pharmaceutical company, though remarkably lucrative, is not an easy one. Getting a therapeutic to the market may take years and that means these organizations must endure austerity at times. Particularly if you’re dealing with a lesser-known pharmaceutical stock, you’ll want to make sure that the underlying company can handle extended periods of little to no revenue.

An Innovative Sector to Change Everything

Few investment markets carry the almost guaranteed relevance of these stocks. For one, the concept of using medicine to heal is ingrained in our collective DNA. For another, the advent of multiple technologies allows scientists to address diseases and conditions that were unimaginable to approach even just a few years ago.

Still, you should be very careful in which individual names you wager on. To give you the best chances of success, go with pharmaceutical stocks tied to stable financials and a promising therapeutic pipeline.

Frequently Asked Questions



About Joshua Enomoto

His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.