In this piece, we will take a look at the 10 cheap pharmaceutical stocks to buy according to short sellers.
The pharmaceutical industry is one of the most interesting sectors to invest in. This is because while most industries can easily be broadly categorized into either being vulnerable or resilient to economic headwinds, pharma companies have the potential to operate in both categories. Firms that develop new drugs, particularly those that operate in the biotechnology industry, don’t do well in a tough economy as they find it difficult to raise capital and keep costs under control. At the same time, large pharmaceutical companies and those that develop and sell generic drugs can survive in a tough economy due to the relatively inelastic nature of their product demand.
As is with all other industries, the pharma industry has also changed throughout the past few decades. This change has been driven by the rise of biotechnology and biopharmaceutical companies that are seeking to open new frontiers for drug development. Before we get to the data, some of the shifts that have taken place include increased spending on acquisitions as opposed to solely on research, a global industry where multinationals operate in multiple markets, and marketing campaigns that seek to extend product life cycles as opposed to maintaining competitive advantage through patents.
Talking about data, biotechnology has been catching up to the pharma sector in terms of revenue, as it accounted for 30% of total pharma sales in 2014 compared to less than 1% in 1991. At the same time, biotechnology operating margins have also been catching up. These ranged between roughly 7% to 12% between 1991 and 1993, were in the red for the next decade until 2024, and surpassed pharma margins of roughly 24% in 2014 to sit at approximately 28%. This gap widens when we remove the impact of R&D which disproportionately impacts biotechnology companies, as for the five years between 2010 and 2014, the pre R&D operating margin of pharma companies declined from 40% to ~28% while the corresponding value for biotechnology firms grew from 40% to ~56%.
During the same time period, biotech firms’ growth to R&D ratio (which measures the growth per unit of R&D per unit of sales) sat at 0.95, more than 10x of the pharma sector’s 0.08. This stellar catch up of biotechnology is also visible in pharmaceutical valuations, since in 2014 biotechnology companies accounted for roughly 40% of drug company valuations for a historic high. In terms of multiples, namely enterprise value to pre R&D operating income, the biotech sector’s premium has noticeably dropped over the pharma sector. It sat at a high of ~77x in 2000 and dropped to ~18x in 2014 for a markedly lower premium over the pharma sector’s ~11x which had sat at 20x in 2000.
Building on this, while the market level valuations of pharma companies have shifted over the years due to the growth in biotechnology companies, this does not provide us with any details about what drives firm level valuations. On this front, research that used ten year data from 101 firms demonstrates that the three key drivers of pharma valuation are R&D, advertisement, and production facilities. These three have regression derived valuation weights of 13.19, 15.85, and 19.13, respectively. This provides key insights as it suggests that R&D is far from being the key competitive edge in the industry as is commonly believed.
In fact, advertising and production are key drives for pharma valuations when we consider the biggest thorn in the industry’s side, namely patents. 2024 has seen weight loss drugs cement their place in the market, and as their patents start to expire, the industry and the government could enter more thorny fights that could impact pharma valuations. The industry’s detractors accuse pharma firms of unsavory practices such as filing ancillary patents that extend patent lifetimes by filing patents for different features of the same product, filing differently worded yet similar patents in what is called building patent thickets, and purposefully delaying upgrades to benefit from evergreening provisions.
While it might seem that this potential disruption to the pharma sector is far off in the future, the reality is different. This is because GLP-1 based weight loss drugs, liraglutide, albiglutide, and dulaglutide, were first approved by the FDA in the 2010s and firms in India and China have already started working on making cheap biosimilars that could attract a wider market. Things are moving fast even in the developed world as the Indian firm Biocon has already secured approval for a liraglutide generic in the UK while the FTC sent letters to ten companies, including some of the biggest weight loss companies, in May as part of its bid to fight bogus patents. Looking forward, you should expect the number of generics to rise and patent fights to intensify since the weight loss pie could be as big as $100 billion by 2030 according to a well known investment bank.
With these details in mind, let’s take a look at the top cheap pharma stocks that have seen mercy from short sellers.
A closeup of pills in a pharmacy, representing the high quality medications of the company.
Our Methodology
For our list of best pharma stocks to buy according to short sellers, we ranked specialty and general drug manufacturers with a market cap greater than $300 million by the percentage of shares outstanding that were sold short and selected the stocks with the lowest percentage. Then, those stocks with a trailing P/E ratio lower than 57.63 or a current P/E ratio lower than 38.94 were chosen. These are the sector averages for the pharma industry.
For these stocks, we also mentioned the number of hedge fund investors. 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).
10. Johnson & Johnson (NYSE:JNJ)
Short Interest as % of Shares Outstanding: 0.78%
Number of Hedge Fund Investors In Q2 2024: 80
Johnson & Johnson (NYSE:JNJ) is one of the biggest pharmaceutical companies in the world. 2024 has been a very important year for the firm as it has agreed to pay a whopping $700 million to settle lawsuits surrounding its talcum powder. The impact of the payout will be evident on Johnson & Johnson (NYSE:JNJ)’s balance sheet for years to come, and the firm also secured a major relief in August when sources reported that it had received the adequate number of votes to declare bankruptcy as part of the $6.4 billion in talcum powder lawsuits that it is facing. On the product front, Johnson & Johnson (NYSE:JNJ) is expected to lose exclusivity of its arthritis drug called Stelara in 2025 which could create revenue headwinds as the product has generated as much as $9 billion in revenue for the firm in the past, Additionally, it is also focusing on its growing medical devices business and expanded its presence in the market through an August acquisition of a heart device maker.
Johnson & Johnson (NYSE:JNJ)’s is quite focused on the MedTech business as evidenced during the Q2 2024 earnings call:
“Turning to MedTech, we continue to advance our pipeline, launch new commercial products and integrate strategic acquisitions that broaden and further differentiate our portfolio. In cardiovascular, we are enhancing our portfolio and shifting into higher growth markets through strategic acquisitions such as Shockwave Medical. In May, we announced the launch of our CARTO 3 Version 8 electroanatomical mapping system. This is the latest version of our 3D heart mapping system, which has machine learning capabilities that increase efficiency, reproducibility, and accuracy in maps electrophysiologists use to treat atrial fibrillation and other arrhythmias. In pulsed field ablation, we initiated the commercial launch of the VARIPULSE platform in the EU and Japan receiving early positive physician feedback in the external evaluation period.
We also delivered results from the pivotal phase of the admIRE trial, where the VARIPULSE platform demonstrated 85% peak primary effectiveness with minimal adverse events, short PFA application times and low fluoroscopy exposure. In orthopedics, we received 510(k) FDA clearance for the clinical application of the VELYS Robotic-Assisted Solution in unicompartmental knee arthroplasty. This is designed for both medial and lateral procedures enabling surgeons to guide precise implant placement without a CT scan. In surgery, we launched the ECHELON 3000 in the U.S., which combines 3D stapling and gripping surface technology to enable greater staple line security. This has been shown to deliver 47% fewer leaks, reduce surgical risks and improve surgical outcomes.”
9. GSK plc (NYSE:GSK)
Short Interest as % of Shares Outstanding: 0.60%
Number of Hedge Fund Investors In Q2 2024: 36
GSK plc (NYSE:GSK) is a British pharmaceutical giant headquartered in Brentford. Its global presence and diversified product portfolio which covers vaccines, specialty, and generic medicines means that the firm can profit from all stages and kinds of the pharma chain and products. GSK plc (NYSE:GSK)hefty resources, as evidenced by its GBP4.9 billion in cash and equivalents means that the firm can keep the pedal on the metal when it comes to drug development. As of now, the firm has 70 new drugs under development in its pipeline, which include seven drugs in phase three testing. Through these, GSK plc (NYSE:GSK) has big plans for its future, as it is aiming for GBP38 billion in sales in 2031. Focusing on the present, three of the firm’s top selling products are Menveo and Bexsero which are meningitides treatments and Shingris, which is a treatment for herpes. Other fast growing drugs include a lead disease treatment called Nucala and HIV medicine called Cavenuva.
GSK plc (NYSE:GSK)’s management provided key details for fast growing HIV portfolio – a major catalyst – during the Q2 2024 earnings call:
“Our oral 2-drug regimens and long-acting injectables continue to transform the HIV marketplace. Dovato delivered sales of £551 million in the quarter. The strong body of clinical data and real-world evidence reinforcing the efficacy and durability of this medicine continues to grow. At the International AIDS conference last week, results of the PASO DOBLE study a large head-to-head randomized clinical trial of Dovato compared against the 3-drug regimen, Biktarvy, showed non-inferior efficacy and significantly less weight gain.
This is important because we know people living with HIV are concerned about taking more medicines as they age as well as the long-term risk of metabolic diseases that can come with weight gain. Our long-acting portfolio also continues to perform strongly, delivering more than 50% of total HIV growth. Cabenuva grew 42%, driven by patient preference and proven and durable efficacy. CASM LATITUDE data presented at CROI and data from real-world cohorts that include over 10,000 people living with HIV in diverse settings has resonated strongly with physicians and has supported increased breadth and depth of prescribing. Apretude grew more than 100% in the quarter. This medicine has demonstrated proven superior efficacy compared with daily orals and a positive safety profile and high patient preference.
As a reminder, the registrational HPTN 084 study of PrEP in women was the first to show 0 infections in participants who received injections as described per protocol. We believe that long-acting therapies are the future of HIV care, empowering people impacted by HIV with choice and addressing the barriers standing in the way of reaching the end of the HIV epidemic. Looking at the long-acting market, we can see that the treatment market is currently approximately 10x larger than the PrEP market at about £20 billion, which will have a significant impact on the sales potential for long-acting options. In the long-acting inject for treatment setting, there are no competitor launches planned before 2028. We continue to see strong progress across our pipeline.”
8. Sanofi (NASDAQ:SNY)
Short Interest as % of Shares Outstanding: 0.44%
Number of Hedge Fund Investors In Q2 2024: 28
Sanofi (NASDAQ:SNY) is a French pharmaceutical giant that is one of the biggest and most diversified pharma companies in the world. Its product portfolio stretches from branded products to generic drugs, general healthcare products, and vaccines. The firm’s cash and equivalents of EUR8.8 billion also provide it with considerable resources to invest in new production or research facilities for new drug development. These days, Sanofi (NASDAQ:SNY)’s story surrounds its Dupixent drug which is the European Union’s first approved drug for chronic obstructive pulmonary disease or COPD. This market is estimated to be worth $61.5 billion by 2032, and Sanofi (NASDAQ:SNY)’s early mover advantage should provide it with key patents that it can milk for most of the market’s early growth phase. The firm’s R&D dominance is also evidenced by its pipeline which has 33 products in Phase 3 trials. This aggressive growth has come at a cost though as evidenced by Sanofi (NASDAQ:SNY)’s decision to abandon its target of 32% operating margin in 2025 due to a focus on R&D. Any further similar announcements, particularly those surrounding a consumer healthcare spinoff could mean trouble for the stock especially since P/E of 29.58 is quite higher than rival GSK’s 14.
Sanofi (NASDAQ:SNY)’s management shared important details for its pipeline during the Q2 2024 earnings call:
“On my last slide, I would like to highlight the exciting upcoming news flow for the next 18 months in support of increased R&D productivity. We plan 12 phase 3 readouts, 13 submissions, nine regulatory decisions, and we look forward to keeping you updated on the progress. Before handing back to Paul, I’d like to extend my sincere thanks to every colleague in the R&D team for the work they do for patients.”
7. ANI Pharmaceuticals, Inc. (NASDAQ:ANIP)
Short Interest as % of Shares Outstanding: 0.36%
Number of Hedge Fund Investors In Q2 2024: 18
ANI Pharmaceuticals, Inc. (NASDAQ:ANIP) is a small Minnesota based firm that sells generics as well as branded products. Its lead product is Cortrophin gel, which accounts for the lion’s share of ANI Pharmaceuticals, Inc. (NASDAQ:ANIP)’s revenue. This is a diversified medicine that helps patients with rare and other diseases such as arthritis and eye diseases. ANI Pharmaceuticals, Inc. (NASDAQ:ANIP) has also been following the trend of growing its pharma business through acquisitions, and it has agreed to acquire an ophthalmology company with $105 million in 2024 projected revenue through branded products. The deal could boost ANI Pharmaceuticals, Inc. (NASDAQ:ANIP)’s income statement, and it could diversify its product portfolio, which remains heavily dependent on Cortrophin.
ANI Pharmaceuticals, Inc. (NASDAQ:ANIP)’s management shared key details during the Q2 2024 earnings call about expanding its production capacity, which is another key driver of pharma valuations:
“We have launched three new products so far in the third quarter and have a number of products pending approval that we expect to launch in the second half. We made substantial progress on bringing online the significant capacity expansion at our New Jersey site and believe all 15 new manufacturing suites and the new QC lab will be fully operational in the second half of 2024. The New Jersey site expansion will support the future growth of our generics business. Revenue for established brands was $14.9 million during the quarter, a decrease of 49% from the prior year period. The performance was anticipated and in line with our expectations and guidance. As a reminder, we noted on the first quarter call in May that we did not expect the tailwinds arising from competitor supply dynamics to persist beyond the first quarter.”
6. Haleon plc (NYSE:HLN)
Short Interest as % of Shares Outstanding: 0.34%
Number of Hedge Fund Investors In Q2 2024: 18
Haleon plc (NYSE:HLN) is a British firm that sells over the counter drugs and consumer healthcare products. This makes it a relatively stable company that doesn’t have to compete by investing heavily in R&D or taking the risk of regulatory headwinds. Its business model also means that Haleon plc (NYSE:HLN) can benefit from beefy margins. The firm’s trailing twelve month gross margin is a strong 59%, which makes it important for it to maintain this trend in order to maintain its current trailing P/E valuation of 32. Haleon plc (NYSE:HLN) is also currently aiming to bring the erectile dysfunction drug Eroxon to the US, which has contributed to a slight margin erosion this year. The margins can drop in the future too, given that the firm has benefited from pricing power over the past months due to historic inflation in the UK and worldwide. Along with margins and pricing power, volume is another key factor in Haleon plc (NYSE:HLN)’s story.
Haleon plc (NYSE:HLN)’s management commented on its margins during the Q2 2024 earnings call:
“So when you look at last year, last year Half 1 was 9 and Half 2 was 12, so we’re cycling over a much stronger Half 2 from prior year. And then there’s really 4 reasons why organic profit growth is going to be lower than the 11% we’ve seen in Half 1. And I think you already mentioned 2 of – or one of them in your question, Iain. So I think the biggest one really, and I’m going to do the order of sort of sizing and magnitude. The first reason it’s going to be lower is the phasing of the cost inflation. Cost inflation was really at its highest point in Half 1 of last year, and then, we saw costs starting to come down in Half 2 of last year. And you saw that come through in our Q4 margin last year when gross margin started to grow than – ahead of the rate of sales growth.
So Half 1 was really a low prior gross profit comparator. So as we get into Half 2 this year, we’re going to start lapping the benefit of those lower costs. And usually, you have this normal time lag when the costs come in until they run through inventory to come up. So that won’t repeat in Half 2 of this year. Then the second reason is the one you mentioned, Iain. So yes, A&P growth will be higher in Half 2 than it was in Half 1. And also here, a reminder, last year, A&P in Half 2 was only up 1%. So – and then in addition, we’re going to fully support the launch of Eroxon in addition to continue investing in the brands that deliver the growth, so continued high and strong investment into the launches we made, especially clinical wide on Sensodyne and on the high-growth drivers like Centrum, plus all the geographic expansion that is running.”
5. HUTCHMED (China) Limited (NASDAQ:HCM)
Short Interest as % of Shares Outstanding: 0.28%
Number of Hedge Fund Investors In Q2 2024: 7
HUTCHMED (China) Limited (NASDAQ:HCM) is a Hong Kong based pharma company that focuses primarily on developing treatments for cancer and tumors. This means that it is an R&D intensive business that has to wait for the revenue to flow in – a trend that’s visible in HUTCHMED (China) Limited (NASDAQ:HCM)’s financial performance. Between the years 2020 to 2023, 2023 was the only one where HUTCHMED (China) Limited (NASDAQ:HCM) generated a profit which sat at $100.7 million. This profit was accompanied by a strong 96.7% annual growth in the firm’s revenue. Key to HUTCHMED (China) Limited (NASDAQ:HCM)’s growth profile has been its FRUZAQLA drug for colon cancer and its partnership with Japanese cancer drug firm Takeda. Takeda has agreed to pay HUTCHMED (China) Limited (NASDAQ:HCM) a total of $400 million in upfront payments for FRUZAQLA, and the $280 million payout out of this in 2023 drove the firm’s revenue. Future payments could mean tailwinds for the stock, while any regulatory hurdles or untoward news particularly for the colon cancer drug could spell trouble.
4. Novartis AG (NYSE:NVS)
Short Interest as % of Shares Outstanding: 0.28%
Number of Hedge Fund Investors In Q2 2024: 30
Novartis AG (NYSE:NVS) is the Swiss pharma giant headquartered in Basel. It sells prescription drugs for a variety of ailments such as those involving the liver, heart, nervous system, and kidneys. Right now, its two hottest drugs are Scemblix and Kisqali, which are used to help patients with leukemia and breast cancer and as an adjuvant, respectively. This means that Novartis AG (NYSE:NVS)’s performance is somewhat tied to these drugs, as well as other hot products such as its prostate cancer drug Pluvicto and heart disease drug Leqvio. Particularly for Pluvicto, Novartis AG (NYSE:NVS) has to fork out royalty payments which means that the firm has to carefully map out its sales estimates and marketing expenses to ensure the drug remains a money maker. The firm’s global footprint also places a wide market at its disposal, allowing it to target multiple geographies with its drugs. At the same time, Novartis AG (NYSE:NVS) has to keep focus on R&D since its status as a leader in developing branded drugs means that the firm loses revenue once patents expire – requiring it to continuously launch new products.
Novartis AG (NYSE:NVS)’s management shared key details for its pipeline during the Q2 2024 earnings call:
“Turning to our renal portfolio, as you all know, we’ve been working to build an attractive portfolio to manage IgAN, C3G and related renal diseases.
And as part of that effort, we acquired atrasentan. And in the Phase III ALIGN-IgAN study, we announced at ERA in May, a 36% proteinuria reduction relative to placebo. We’re very excited about this medicine as we think it can be a foundational medicine to provide hemodynamic and nephroprotective potential for patients and physicians. It’s a clinically meaningful proteinuria reduction. We see a very favorable safety profile. We think up to 50% of patients with persistent proteinuria progress to kidney failure. So important that these patients get better options. We’ve submitted to FDA. And of course, the study continues in a blinded fashion to 2026 when we would read out the eGFR. So looking forward to launching this medicine in 2025. Alongside that, with iptacopan, we also announced at ERA, the full result Phase III APPEAR-C3G study, which demonstrated 35% proteinuria reduction relative to placebo.
You can see the design on the left-hand side of the slide. On the right-hand side, you see that impressive minus 30% versus an increase of 7.6% in the placebo arm. We saw numerical improvements in eGFR, favorable safety profile overall. This would be the first treatment — potential treatment targeting the complement pathway in C3G. And again, in these patients, 50% of patients develop kidney failure requiring dialysis. Now importantly, today, we’re also announcing that we have end of study results for this medicine at the 12-month time point that data is consistent with the 6-month data, which now allows us to move forward with the filing in the second half of 2024, with an expected launch next year. We’ll present that end-of-study data at an upcoming medical meeting.”
3. Takeda Pharmaceutical Company Limited (NYSE:TAK)
Short Interest as % of Shares Outstanding: 0.20%
Number of Hedge Fund Investors In Q2 2024: 10
Takeda Pharmaceutical Company Limited (NYSE:TAK) is a Japanese pharmaceutical company that develops and sells drugs for cancer, immune system disorders, rare diseases, and other ailments. Two of the firm’s hottest drugs right now are its dengue medication QDENGA and Colitis treatment ENTYVIO. QDENGA has been approved by the World Health Organization (WHO) as a pre qualified dengue vaccine, and Takeda Pharmaceutical Company Limited (NYSE:TAK)’s partnerships with the Gavi medicine alliance should prove beneficial as it will allow the drug to expand its global outreach and benefit from established supply chains for distribution. ENTYVIO is also in the early stages of its US launch which could spell further revenue tailwinds for Takeda Pharmaceutical Company Limited (NYSE:TAK). The firm is also expanding its market for a post surgical complication drug, and in a crucial win, its partnership with Hutchmed (#7th on this list) secured the FDA’s approval in October 2023 for the FRUQZALA drug for colon cancer.
Another key factor for Takeda Pharmaceutical Company Limited (NYSE:TAK)’s hypothesis is its pipeline which should help with future revenue as patents expire. Here’s what the firm had to say during the Q1 2024 earnings call:
“Over the remainder of the fiscal year, we expect multiple pipeline programs to progress into Phase III, and we are awaiting our R&D investment towards future quarter accordingly. We also expect VYVANSE generic erosion to come back in line with projection. We continue to be very focused on improving our core operating profit margin through our multiyear efficiency program. This program is focused on 3 areas of opportunity: increasing organizational agility, improving procurement savings and strengthening how we leverage data, digital and technology across Takeda.
Our progress on this program is on track. In Q1, we took concrete steps to improve organizational agility, for example, in R&D and in our U.S. commercial organization. We also identified and executed new procurement-led efficiencies. For example, we have been using data, technology and AI to optimize our supplier selection process. We believe that our investment in data, technology and AI will yield productivity and efficiency gain across our value chain. For example, in manufacturing and quality, our goal is to accelerate the release of drug batch, which will improve our working capital and our ability to supply it. We also took steps to further enrich our pipeline. We signed 2 option agreements for mid- and late-stage programs: one with Ascentage for olverembatinib for chronic myeloid leukemia and other hematological concerns; the other with AC Immune for ACI-24.060, an active immunotherapy designed to delay or slow Alzheimer’s disease progression.
Agreements such as these complement our existing pipeline and portfolio and all promise for enriching our pipeline in the future.”
2. AstraZeneca PLC (NASDAQ:AZN)
Short Interest as % of Shares Outstanding: 0.18%
Number of Hedge Fund Investors In Q2 2024: 49
AstraZeneca PLC (NASDAQ:AZN) is a British pharmaceutical company headquartered in Cambridge. It has one of the most diversified drug pipelines in the industry which is made of items such as its ADRIATIC drug for small cell lung cancer, LAURA drug for stage three lung cancer, and DESTINY drug for breast cancer. All these drugs are in late stage development and provide significant catalysts for AstraZeneca PLC (NASDAQ:AZN). As if this wasn’t enough, the firm’s drug for ovarian cancer called LYNPARZA has also received the European Commission’s positive recommendation, joining IMFINZI, a diversified immunotherapeutic treatment for several cancers including bile duct and gallbladder cancer. These drugs have demonstrated good performance in phase three trials, which increases their chances of a successful commercial launch and future revenue for AstraZeneca PLC (NASDAQ:AZN). Consequently, the firm is trading at a high P/E ratio of 41 and a more modest forward P/E ratio of 20.
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 record 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.”
1. Kamada Ltd. (NASDAQ:KMDA)
Short Interest as % of Shares Outstanding: 0.06%
Number of Hedge Fund Investors In Q2 2024: 3
Kamada Ltd. (NASDAQ:KMDA) is a small Israeli drug manufacturer that makes treatments for virus based and other diseases. It is one of the few companies in the world that focuses almost exclusively on making plasma based drugs. The firm currently generates revenue from six drugs, and it benefits from a global presence in 30 countries. Kamada Ltd. (NASDAQ:KMDA)’s top two drugs on which its hypothesis depends are KEDRAB and CYTOGAM. Kamada Ltd. (NASDAQ:KMDA) is also currently focusing on developing a treatment for a rare lung disease called AAT or alpha-1 antitrypsin deficiency. This treatment is currently in phase three clinical trials, and the market for this disease is estimated by some researchers to be worth $10 billion by 2033. Should Kamada Ltd. (NASDAQ:KMDA) secure regulatory approval and commercialize its inhalable AAT drug then an early mover advantage coupled with robust patents could enable it to add another viable product to its $142 million a year revenue generating portfolio.
Kamada Ltd. (NASDAQ:KMDA)’s management shared key details for the AAT therapy during its Q2 2024 earnings call:
“So as described during the call, we did submit the revised Statistical plan to the FDA during the second quarter. We expect feedback before the end of the year. We hadn’t — we didn’t receive feedback yet. So we’re just waiting now to get the initial feedback and if needed, there’s going to be additional discussion between us and the FDA in order to have a clear road map in regards to that previous discussion about potentially changing the p-value for efficacy. Enrollment continues, we are around 40% to 45% into the study enrollment. In general, being a rare disease and being a placebo-controlled study, recruitment is always a challenge in those type of studies, but we are making progress.
We opened additional sites recently, and we expect to complete enrollment to the study by end of next year. The impact of reducing — potentially reducing number of patient — number of subjects will be reflected in a matter of a few months difference in terms of recruitment into the study.”
KMDA is a cheap pharma stock with low short interest percentage. But our conviction lies in the belief that some 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 KMDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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