In this article, we will be taking a look at the 10 best cancer stocks to buy now.
Global Oncology Market Overview and Drug Shortages
In 2022, the global oncology market was valued at approximately $203.42 billion and is expected to reach over $470.61 billion by 2032, growing at a compound annual growth rate (CAGR) of 8.8% from 2023 to 2032. The market for cancer drugs alone was estimated at $147 billion in 2022 and is forecasted to exceed $300 billion by 2032. In 2020, approximately 19.3 million new cancer cases and about 10 million cancer-related deaths were recorded worldwide. By 2040, new cancer cases are expected to increase by 47%. The U.S. oncology market is a significant segment of the global market. Cancer medicine spending in the U.S. was a large part of the $223 billion spent globally on cancer medicines in 2023.
The picture of oncology is gradually changing, and companies are progressively working on the further discovery of the variants aimed at developing new treatments that can increase the chances of recovery for a wider population of patients. Thus, it is possible to note that the availability and consumption of these new cancer medications differ greatly around the globe. An analysis of clinical trials for oncology conducted in 2022 shows that clinical trial activity is steadily on the rise, 22% higher than in the baseline year of 2018, as reflected by IQVIA. In the last one-year period, a global one percent increment in cancer patients has been observed, and across five years, an overall five percent increase in patients undergoing cancer treatment is quite evident. Future predictions show that cancer medications will cost $375 billion by 2027, while the total global expenditure in the year 2022 will be $196 billion. Currently, the oncology pipeline is growing exceptionally fast with over 2,000 products being in the pipeline. Of these products, 71% are being created by high-growth biopharmaceutical firms of moderate size only. These companies have further scaled up their funding for the advancement of cancer treatment solutions from 51% in 2017. Globally, 237 new active substances for cancer have been launched in the market over the last 20 years and about 115 over the last five years. NAS has flown 78 times in the last five years, and 189 times overall within the last twenty years in the United States.
Thus, the US FDA is thinking of allowing the temporary import of chemotherapy drugs from manufacturers that do not have clearance in the United States due to a shortage of over a dozen cancer medications. This step has been deemed necessary to lessen the burden of paradoxical inflation on the hospitals especially regarding crucial drugs such as cisplatin and carboplatin that are vital in combating cancer. Thus, WHO has identified these drugs as essential in primary health care. Because of such problems, hospitals have had to adjust the usage by lowering the delivered doses and serving the most needy patients. Dr. Abdul Rafeh Naqash of the Stephenson Cancer Center at the University of Oklahoma also affirmed it.
“The lawmakers in the country need to understand that this is a big problem at this point, where unless something changes in the next few weeks, this can lead to a big national emergency from a patient and health care standpoint.”
The shortages of cisplatin and carboplatin stem from a temporary production halt at an Intas Pharmaceuticals facility in India. Dr. Karen Knudsen, CEO of the American Cancer Society, highlighted that these shortages reflect ongoing economic issues in the generic drug market. She also mentioned that the demand for these drugs is expected to rise in the coming years due to an aging population, as older individuals have a higher risk of cancer.
A scientist in a lab researching the biology of a cancer cell.
Our Methodology
Our methodology for identifying the best cancer stocks by sifting through ETFs and online rankings. We compiled an initial list of companies with a market capitalization exceeding $1 billion. From that, we selected the 10 stocks that were the most widely held by hedge funds, as of Q2 2024. The stocks are sorted in ascending order of the number of hedge funds that have positions in them.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Here is our list of the 10 best cancer stocks to buy now.
10. Novartis AG (NYSE:NVS)
Hedge Fund Holdings: 30
Novartis AG (NYSE:NVS) is a Swiss multinational pharmaceutical company that specializes in innovative drugs across key areas like oncology, rare diseases, neuroscience, and cardio-metabolic conditions. The company has a strong focus on innovation, particularly in oncology, Novartis’s robust late-stage pipeline is set to drive long-term growth, with new drugs expected in critical therapeutic areas. The U.S. accounts for about one-third of its global sales.
A key catalyst for Novartis AG (NYSE:NVS) is its acquisition of MorphoSys AG for €2.7 billion, enhancing its oncology pipeline with pelabresib, a late-stage BET inhibitor for myelofibrosis. Pelabresib has shown promising Phase 3 trial results, meeting its primary endpoint of spleen volume reduction. With regulatory filing expected in the second half of 2024, it could become a groundbreaking first-line treatment for myelofibrosis, creating a new market segment for Novartis.
In Q2 2024, Novartis AG (NYSE:NVS) reported strong financial results, with adjusted earnings of $1.97 per share on $12.51 billion in sales, beating expectations. This marks an increase from $1.73 per share and $13.62 billion in sales the previous year. The core operating income margin neared 40%, reflecting better profitability. Novartis also raised its projected operating income growth to the mid-to high-teens range, signaling confidence in its near-term outlook.
As of Q2 2024, the company had 30 hedge fund holders with Renaissance Technologies being the top holder with a stake worth $266,126,792.
9. AstraZeneca PLC (NASDAQ:AZN)
Hedge Fund Holdings: 49
AstraZeneca PLC (NASDAQ:AZN) is a global biopharmaceutical company that specializes in innovative prescription medicines across various therapeutic areas, with a strong focus on oncology. The company excels in developing and selling drugs for cancer, cardiovascular, renal, metabolism, and respiratory diseases. AstraZeneca’s notable success in oncology which is driven by several blockbuster drugs, has led to sales exceeding $5 billion in a single quarter which highlights the company’s leadership in cancer treatment.
AstraZeneca PLC (NASDAQ:AZN) stands out for its groundbreaking cancer treatments, particularly its flagship drug Tagrisso, which reduces disease progression risk by 84% in Stage 3 lung cancer. The company is also advancing in targeted therapies with innovative CAR-T treatments for liver cancer and new approaches for breast cancer, reinforcing its leadership in the field.
As for its current portfolio, here’s what AstraZeneca PLC (NASDAQ:AZN)’s management shared during the Q2 2024 earnings call:
“As Pascal just highlighted, we have had a very strong start to the year with total revenue increasing 18%. This was driven largely by substantial product sales growth across the portfolio. Alliance revenue also increased by 50% in the first half, mainly driven by an increase in HER2 sales in regions where Daiichi Sankyo recorded revenue. Please turn to the next slide. This is our core P&L. In the first half, total revenue grew 18%, as I just mentioned, and our core product sales gross margin was 82.4%. We’ve previously said that we anticipate a slightly lower core product sales gross margin for the full year versus 2023, and we expect downward pressure in the second half driven by the usual seasonal impact of medicines such as FluMist, as well as increased before supply, which comes at a lower gross margin.”
8. AbbVie Inc. (NYSE:ABBV)
Hedge Fund Holdings: 67
AbbVie Inc. (NYSE:ABBV), a global biopharmaceutical company, develops and sells prescription medications for various health conditions, focusing on chronic autoimmune diseases, oncology, virology, and neurological disorders. The company recently strengthened its oncology presence by acquiring ImmunoGen for $10.1 billion, adding ELAHERE, an ADC approved for platinum-resistant ovarian cancer, to its portfolio. The company’s focus on developing targeted medicines that impede cancer cell reproduction or enable their death through immuno-oncology approaches and tumor antigen targeting is another catalyst for growth. AbbVie’s expansion into solid tumors, which represent over 90% of cancers, presents a significant opportunity for market expansion.
Over the past five years, AbbVie Inc. (NYSE:ABBV) has delivered impressive returns, achieving 129% in total returns and outpacing the S&P 500. This performance was largely driven by Humira’s success and strategic acquisitions like Allergan. AbbVie is trading at nearly 15 times projected 2024 profits, which may seem fully priced for a company facing near-term growth challenges. However, this valuation could be considered reasonable given the company’s strong dividend yield of 3.8% and potential for future growth once the Humira decline stabilizes. CFRA maintains a “buy” rating on AbbVie with a price target of $195. The company also announced the acquisition of Cerevel Therapeutics recently for $8.7 billion, expanding its presence in the neurological disorders space. As of Q2 2024, there were 67 hedge fund holders in the company with Citadel Investment Group being the largest hedge fund with 2,617,800 worth $449,005,056.
AbbVie Inc. (NYSE:ABBV) is making significant progress in its oncology pipeline, particularly in solid tumors. The Phase 2 PICCOLO study showed that Elahere, as a monotherapy for ER alpha-positive, third-line-plus platinum-sensitive ovarian cancer, achieved a 52% objective response rate and an 8.25-month median duration of response. AbbVie plans to submit Teliso-V for accelerated approval for c-Met overexpressing, EGFR wild-type non-small-cell lung cancer, with a decision expected in 2025. Additionally, promising data from the Phase 1 trial of ABBV-400, a next-generation c-Met ADC, has led to its advancement in late-line colorectal cancer.
7. Abbott Laboratories (NYSE:ABT)
Hedge Fund Holdings: 69
Abbott Laboratories (NYSE:ABT) is a global healthcare company known for its diverse range of medical devices, diagnostics, nutritional products, and branded generics. The company excels in innovation, with standout products like the FreeStyle Libre for diabetes management and its growing portfolio of minimally invasive cardiovascular technologies, including MitraClip and Amplatzer Amulet. Abbott’s key driver in oncology is its innovative diagnostic technologies, particularly the Alinity m system, which enhances early cancer detection. The recent acquisition of Cardiovascular Systems, Inc. (CSI) also expands Abbott’s vascular device portfolio, offering potential new opportunities in cancer-related vascular treatments.
Abbott Laboratories (NYSE:ABT) reported Q2 2024 financial results with $10.4 billion in sales, driven by a strong base business performance. The company saw a 4.0% reported sales growth and 9.3% organic growth, led by double-digit growth in Medical Devices. GAAP diluted EPS was $0.74, with adjusted EPS at $1.14. Abbott raised its full-year 2024 EPS guidance to $3.30-$3.40 GAAP and $4.61-$4.71 adjusted. The company also narrowed its organic sales growth guidance to 9.5%-10.0%. Key product approvals include the Esprit™ BTK system, Lingo™ and Libre Rio™ glucose monitoring systems, and the AVEIR dual chamber leadless pacemaker.
As of Q2 2024, there were 69 hedge fund holders in the stock with Fisher Asset Management being the largest hedge fund with 10,516,289 worth $1,092,747,717. The stock also has a strong buy rating based on 14 Wall Street analysts. The average price target is $127.08, with a high of $143.00 and a low of $107.00, indicating a 12.56% increase from the last price of $112.90.
6. Danaher Corporation (NYSE:DHR)
Hedge Fund Holdings: 83
Danaher Corporation (NYSE:DHR) is a global science and technology innovator focused on improving human health through its Biotechnology, Life Sciences, and Diagnostics segments. The company provides bioprocessing technologies, lab equipment, and diagnostic tools, serving pharmaceutical companies, research institutions, and hospitals worldwide. In cancer research and treatment, Danaher stands out for its comprehensive approach, offering rapid PCR testing through Cepheid, genomic tools via IDT, bioprocessing technologies from Pall and Cytiva, and advanced pathology solutions from Leica Microsystems. These capabilities support cancer diagnostics, research, and therapy development across the entire workflow.
In Q2 2024, Danaher Corporation (NYSE:DHR) reported $5.74 billion in sales, surpassing expectations of $5.59 billion despite a 3% year-over-year decline. On an organic basis, revenue dropped 3.5%, but the company’s bioprocessing division showed recovery, with orders increasing sequentially. A key catalyst was Danaher’s Cepheid division, which exceeded sales expectations by $100 million, signaling resilience in its core businesses.
In Q2 2024, there were 83 hedge fund holders in the company with Fisher Asset Management being the largest holder with 4,436,341 worth $1,108,420,324. Danaher Corporation (NYSE:DHR) receives a moderate buy rating from 14 Wall Street analysts. The average price target is $280.93, with a high of $310.00 and a low of $250.00, representing a 5.59% increase from the last price of $266.06.
5. Pfizer Inc. (NYSE:PFE)
Hedge Fund Holdings: 84
Pfizer Inc. (NYSE:PFE) has established itself as a powerhouse in the fight against cancer. The company currently markets three blockbuster oncology therapies: Ibrance for breast cancer, Xtandi for prostate cancer, and Inlyta for kidney cancer. These drugs, along with a dozen other cancer treatments, contribute significantly to Pfizer’s annual sales. What sets Pfizer apart in the oncology field is its commitment to innovation and strategic acquisitions. The company’s recent $43 billion acquisition of Seagen, a biotechnology firm specializing in antibody-drug conjugates (ADCs), has significantly bolstered its position in the cancer treatment market. This move is expected to enhance Pfizer’s oncology portfolio and contribute more than $10 billion in risk-adjusted revenues by 2030.
Pfizer Inc. (NYSE:PFE)’s investment in ADC technology through the Seagen acquisition is a game-changer. ADCs are cutting-edge therapies that precisely target tumors with powerful chemotherapy while minimizing damage to surrounding tissues. This technology is highly sought after in the industry, positioning Pfizer at the forefront of cancer treatment innovation
BMO Capital Markets analysts reiterated their “Outperform” recommendation on Pfizer Inc. (NYSE:PFE) shares. On May 2, the brokerage provided a price target of $36.00.
The investor letter for the first quarter of 2024 by investment management firm Parnassus Investments stated the following:
“During the quarter, we added new positions in Pfizer Inc. (NYSE:PFE), NICE, and Charter Communications. We purchased Pfizer to capture the potential upside from any turnaround following the COVID-induced boom-bust cycle of the last few years. Pfizer’s stock price sank by more than 40% in 2023 as COVID-19 vaccine revenues rolled off, providing an attractive entry point for us. The company completed its acquisition of Seagen, which should strengthen Pfizer’s pipeline in antibody-drug conjugates (ADC). Pfizer also offers an attractive dividend yield.”
4. Merck & Co., Inc. (NYSE:MRK)
Hedge Fund Holdings: 96
Merck & Co., Inc. (NYSE:MRK) is a global pharmaceutical company specializing in oncology, vaccines, hospital care, and animal health. It generates revenue mainly from pharmaceutical products and vaccines, with a significant portion coming from its cancer drug Keytruda. Merck’s dominance in cancer treatment, particularly with Keytruda, has made it a key player in the market due to the drug’s effectiveness across various cancers.
While Keytruda is a significant contributor to Merck’s success, the company maintains a diversified portfolio. Its HPV vaccine, Gardasil, saw a 14% increase in sales to $2.25 billion in Q1 2024, demonstrating Merck & Co., Inc. (NYSE:MRK)’s strength in the vaccine market. The company is developing innovative combinations of Keytruda with other immunotherapies, including TIGIT, LAG3, and CTLA-4 inhibitors. In partnership with Moderna, Merck is developing a personalized mRNA therapeutic cancer vaccine (V940/mRNA-4157) to be used in combination with Keytruda. Merck & Co., Inc. (NYSE:MRK) faces a significant revenue risk from Keytruda’s patent expiration in 2028. To address this, the company is diversifying its pipeline with new cancer candidates, making strategic acquisitions like Harpoon Therapeutics, and planning eight new product launches between 2025 and 2030.
In Q2 2024, there were 96 hedge fund holders in the stock with Fisher Asset Management being the largest holder with 14,266,015 shares worth $1,766,132,800. The stock holds a Strong Buy rating based on 17 Wall Street analysts. The average price target is $140.82, with a high of $155.00 and a low of $125.00, indicating a 19.95% potential increase from the current price of $117.40.
3. Eli Lilly and Company (NYSE:LLY)
Hedge Fund Holdings: 100
Eli Lilly and Company (NYSE:LLY) has become a strong player in the oncology market with a diverse portfolio of cancer treatments, combining traditional drugs with advanced biotechnology. Eli Lilly’s $8 billion acquisition of Loxo Oncology in 2019 significantly enhanced its cancer portfolio with promising candidates like LOXO-292, a first-in-class RET inhibitor for certain lung and thyroid cancers, and LOXO-305, an oral BTK inhibitor targeting B-cell leukemias and lymphomas. These additions are poised to boost Lilly’s future revenue and market share in oncology.
Eli Lilly and Company (NYSE:LLY)’s growing oncology portfolio, bolstered by the $1.4 billion acquisition of Point Biopharma, strengthens its position in radioligand therapies for targeted cancer treatments. Additionally, the success of Lilly’s diabetes drug Mounjaro (tirzepatide) in treating obesity could lead to expanded uses and significant revenue growth.
In Q2 2024, Eli Lilly and Company (NYSE:LLY) reported strong financial results with $9.5 billion in revenue, a 28% year-over-year increase, and a 96% rise in EPS to $2.11. This growth was fueled by Mounjaro and Zepbound, which generated $2.9 billion in sales. Lilly’s gross margin improved to 78%, and operating cash flow reached $2.3 billion. With the global GLP-1 agonist market projected to hit $50 billion, Lilly’s products are well-positioned to capture a significant share. Additionally, Lilly’s oncology pipeline and the FDA approval of donanemab for Alzheimer’s offer future growth opportunities.
In Q2 2024, there were 100 hedge fund holders in the company with Fisher Asset Management being the largest fund with 4,888,710 worth $4,426,141,743. The stock holds a Strong Buy rating based on 19 Wall Street analysts. The average price target is $1,042.24, with a high of $1,150.00 and a low of $856.00, representing a 10.08% increase from the last price of $946.80.
2. Thermo Fisher Scientific Inc. (NYSE:TMO)
Hedge Fund Holdings: 108
Thermo Fisher Scientific Inc. (NYSE:TMO) is a global leader in serving science, offering a wide range of products and services to the healthcare, life sciences, and diagnostics industries. The company operates across four main segments: Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics, and Laboratory Products and Services. Thermo Fisher generates revenue from product sales, services, and support contracts. Its collaboration with the National Cancer Institute on the myeloMATCH trial highlights its commitment to advancing cancer research, using NGS technology to accelerate the development of treatments for AML and MDS.
Thermo Fisher Scientific Inc. (NYSE:TMO) provides solutions for HLA labs and transplant teams, supporting organ transplants and drug development. The stock is up 11% this year, with $42.86 billion in sales in 2023. As of Q2 2024, 108 hedge funds held stakes in the company, down from 110 in Q1 20234. The largest stakeholder was Fisher Asset Management, led by Ken Fisher, with a $1,421,748,082 position in the stock. The stock has a Strong Buy rating based on 13 Wall Street analysts. The average price target is $629.83, with a high of $670.00 and a low of $600.00, representing a 2.97% increase from the last price of $611.
Thermo Fisher Scientific Inc. (NYSE:TMO) raised its 2024 revenue guidance to $42.4–$43.3 billion, slightly up from the previous range, and increased its adjusted EPS guidance to $21.29–$22.07 after strong Q2 results. The company’s net profit margin as of June 30, 2024, was 14.69%.
1. Johnson & Johnson (NYSE:JNJ)
Hedge Fund Holdings: 80
Johnson & Johnson (NYSE:JNJ) is a global healthcare conglomerate with two main segments: Innovative Medicine and MedTech. It develops and sells pharmaceuticals, medical devices, and consumer health products to healthcare professionals, hospitals, and consumers worldwide. J&J is particularly strong in oncology, with its cancer drug portfolio driving significant growth. In Q2 2024, J&J’s global oncology sales increased by 16% to $5.09 billion, due to the success of treatments like Darzalex for multiple myeloma and Erleada for prostate cancer.
In Q2 2024, Johnson & Johnson (NYSE:JNJ)’s oncology division drove significant growth, with global sales rising 16% to $5.09 billion, thanks to the strong performance of treatments like Darzalex for multiple myeloma and Erleada for prostate cancer. A major catalyst for future growth is J&J’s $2.0 billion acquisition of Ambrx Biopharma, Inc., announced in January 2024. This acquisition enhances J&J’s portfolio with next-generation antibody-drug conjugates (ADCs), including ARX517 for metastatic prostate cancer, ARX788 for HER2+ breast cancer, and ARX305 for renal cell carcinoma.
As of Q2 2024, 80 hedge funds held stakes in the stock and also held a Moderate Buy rating based on 14 Wall Street analysts. The average price target is $172.46, with a high of $215.00 and a low of $150.00, representing a 5.01% increase from the last price of $164.23.
While we acknowledge the potential of cancer stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
