In this article, we discuss the 10 best pharmaceutical stocks to buy in 2022. If you want to skip our detailed analysis of the pharmaceutical industry and these stocks, go directly to 5 Best Pharmaceutical Stocks to Buy in 2022.
In a post-COVID world, pharmaceutical and biotech companies will be expected to make larger strides as they adapt to artificial intelligence and robotics to enhance drug development and research. The pharma and healthcare industry is focused on gene and cell therapy, monoclonal antibodies, and RNA-based therapeutics heading into 2022 and beyond. The COVID-19 pandemic also pushed for development in clinical trials.
Advancements in medicine and life sciences are being propelled by growing investment across the public and private sectors by multiple forces, including governments, biopharmaceutical companies, technology giants and startups, and even academic institutions, with a focus on bringing to market new innovations that result in predictive and preventative drugs.
The pharmaceutical industry also boasts several players that pay steady dividends and these stocks are held for a diversified income portfolio by investors, including notable industry names like Amgen Inc. (NASDAQ:AMGN), Bristol-Myers Squibb Company (NYSE:BMY), and AbbVie Inc. (NYSE:ABBV).
Our Methodology
We picked pharmaceutical stocks that recently received positive analyst ratings, have strong business fundamentals, and display growth potential. The hedge fund sentiment around each stock was also mentioned to identify the popularity of these companies among the smart money tracked by Insider Monkey as of December 31, 2021.
Photo by Christina Victoria Craft on Unsplash
Best Pharmaceutical Stocks to Buy in 2022
10. Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH)
Number of Hedge Fund Holders: 13
Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) is a California-based specialty pharmaceutical company that manufactures and markets inhalation and intranasal products. At the end of 2021, 13 hedge funds held long positions in Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH), with collective stakes amounting to $28.18 million.
Northland analyst Tim Chiang, who previously named Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) as a top pick for 2022, told investors on February 1 that he believes the recent drop in share price creates a potential buying opportunity. He expects strong top and bottom line growth in 2022 from new product approvals and launches, and has a $29 price target and Outperform rating on Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) shares.
The company received tentative FDA approval on December 29 for Vasopressin, a drug that is meant to increase blood pressure in adults with vasodilatory shock who remain hypotensive despite fluids. Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) shares rose 4% in premarket trading as a result of this announcement.
In addition to Amgen Inc. (NASDAQ:AMGN), Bristol-Myers Squibb Company (NYSE:BMY), and AbbVie Inc. (NYSE:ABBV), Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) is one of the top pharmaceutical companies that hedge funds are gravitating towards.
9. Collegium Pharmaceutical, Inc. (NASDAQ:COLL)
Number of Hedge Fund Holders: 14
Collegium Pharmaceutical, Inc. (NASDAQ:COLL) is an American specialty pharmaceutical company with a drug pipeline focused on pain management.
On February 14, Collegium Pharmaceutical, Inc. (NASDAQ:COLL) announced that it will commence a tender offer to acquire all the outstanding shares of BioDelivery Sciences International, Inc. (NASDAQ:BDSI) at the price of $5.60 per share in an all-cash transaction, representing a total equity value of $604 million.
Needham analyst Serge Belanger on February 15 raised the price target on Collegium Pharmaceutical, Inc. (NASDAQ:COLL) to $34 from $28 and kept a ‘Buy’ rating on the shares. The company’s $604 million acquisition of BioDelivery Sciences International, Inc. (NASDAQ:BDSI) is an “ideal fit” and should strengthen its product portfolio, the analyst told investors in a bullish thesis. He also increased his FY22 EPS view to $4.79 to account for the initial accretion from the addition of BioDelivery’s operations and expected cost synergies.
At the end of Q4 2021, 14 hedge funds were bullish on Collegium Pharmaceutical, Inc. (NASDAQ:COLL) with total stakes equaling $117.9 million, as compared to 13 funds a quarter earlier, holding stakes in Collegium Pharmaceutical, Inc. (NASDAQ:COLL) worth $144.8 million. Rubric Capital Management held a prominent stake in the company as of December 31, 2021, with 2.61 million shares valued at $48.69 million.
8. Sanofi (NASDAQ:SNY)
Number of Hedge Fund Holders: 19
Sanofi (NASDAQ:SNY) develops and markets pharmaceuticals, vaccines, and consumer healthcare products in the United States, Europe, and internationally. The main therapeutic areas targeted by Sanofi (NASDAQ:SNY) include cardiovascular, central nervous system, diabetes, internal medicine, and oncology.
In its Q4 earnings report published on February 4, Sanofi (NASDAQ:SNY) posted EPS of $0.79, beating estimates by $0.07. The company’s revenue came in at $11.45 billion, outperforming estimates by $53.68 million.
UBS analyst Laura Sutcliffe on January 6 raised the firm’s price target on Sanofi (NASDAQ:SNY) to €117 ($132) from €116 ($131) and kept a ‘Buy’ rating on the shares.
According to the Q4 database of Insider Monkey, 19 hedge funds reported owning stakes in Sanofi (NASDAQ:SNY) amounting to $1.47 billion worth of shares.
Here is what Dodge & Cox Funds had to say about Sanofi (NASDAQ:SNY) in its Q3 2021 investor letter:
“Sanofi (3.5% position) is a diversified, global pharmaceuticals company with leading positions in vaccines, consumer health products, rare diseases, and emerging markets. Despite a favorable business mix, Sanofi has underperformed its peers in new product development, commercial execution, and profit growth. A new management team, recruited in 2018-19, has made progress turning the company around. Its drug pipeline is improving, targets for higher margins are being met, and earnings per share are growing. Sanofi also pays a 4% dividend yield, maintains a strong balance sheet, and has relatively low exposure to potential pressures from U.S. drug pricing.”
7. Dynavax Technologies Corporation (NASDAQ:DVAX)
Number of Hedge Fund Holders: 22
Dynavax Technologies Corporation (NASDAQ:DVAX) is a California-based biopharmaceutical company that develops vaccines, with its most notable product being a vaccine for Hepatitis-B. Dynavax Technologies Corporation (NASDAQ:DVAX)’s adjuvant was also used in newly approved COVID-19 shots and booster doses in India.
Goldman Sachs analyst Madhu Kumar reinstated his ‘Buy’ rating and $38 price target on Dynavax Technologies Corporation (NASDAQ:DVAX) on January 5, stating that he is bullish on the company’s long-term opportunity for its hepatitis B vaccine Heplisav-B to prove best-in-class in that space. The analyst also sees near-term value creation from Dynavax Technologies Corporation (NASDAQ:DVAX)’s multiple COVID-19 vaccine partnerships.
Among the hedge funds tracked by Insider Monkey as of the end of December 2021, 22 funds were bullish on Dynavax Technologies Corporation (NASDAQ:DVAX), up from 19 funds in the prior quarter. Partner Fund Management held the biggest stake in the company with nearly 3.81 million shares worth $53.54 million.
6. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
Number of Hedge Fund Holders: 41
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is a New York-based biopharmaceutical company that markets drugs and therapies for rare autoinflammatory conditions, colorectal cancer, cardiovascular disease, rheumatoid arthritis, and Ebola virus, among others.
On February 4, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) reported its Q4 results. The company posted earnings per share of $23.72, exceeding estimates by $3.42. Revenue for the period jumped 104.37% year-on-year to $4.95 billion, surpassing estimates by $425.65 million.
Truist analyst Robyn Karnauskas lowered the firm’s price target on Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) to $728 from $754 on February 8 but kept a ‘Buy’ rating on its shares. The analyst adjusted her model to reflect the sales volume of different Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) products, adding that the key upside for Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is their evolving oncology platform, with key data catalysts expected this year.
According to the fourth quarter database of Insider Monkey, 41 hedge funds held long positions in Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), down from 44 funds in the prior quarter. Harris Associates held the biggest stake in Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) in Q4 2021, with 1.32 million shares worth $834 million.
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is one of the top pharma picks of elite hedge funds, just like Amgen Inc. (NASDAQ:AMGN), Bristol-Myers Squibb Company (NYSE:BMY), and AbbVie Inc. (NYSE:ABBV).
Oakmark Funds shared its stance on Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) in its Q2 2021 investor letter. Here is what the investment management firm said:
“We restored Regeneron Pharmaceuticals from a rather trivial to a more normal position size. You may recall Regeneron performed well for the Fund during the Covid-19 crisis, so we significantly reduced our position as its price-value gap narrowed. During the past several quarters, however, the market has experienced the now infamous “reopening trade,” in which companies that performed well during the pandemic trailed as the economy reopened. Regeneron suffered a similar fate and its shares have lagged the S&P 500 by roughly 4000 basis points, despite the company’s strong fundamentals and robust pipeline of new products. The underperformance widened Regeneron’s price-value gap, so we restored it to a more normal position size.”
Click to continue reading and see the 5 Best Pharmaceutical Stocks to Buy in 2022.
Suggested articles:
- 10 High Yield REIT Dividend Stocks For 2022
- 9 Best Value Stocks to Buy Now
- 10 Notable Earnings Reports to Watch
Disclosure: None. 10 Best Pharmaceutical Stocks to Buy in 2022 is originally published on Insider Monkey.
