In this article, we will be taking a look at the 12 best low price pharma stocks to invest in right now.
The Rising Demand for Weight-Loss Medications and GLP-1 Developments
Healthcare, which includes numerous businesses that offer patient care, conduct research and development of novel treatments, and design, produce, and distribute diagnostic tools and tests, takes the term “defensive” a step further than practically any other industry. Improvements in medical technology, medications, and therapeutic approaches have changed the course of patient care. As the need for quick results has grown, pharmaceutical corporations in particular have drawn much attention. Global pharmaceutical manufacturing was estimated to be worth $516.48 billion in 2022, according to a Grand View Research analysis. From 2023 to 2030, the industry is expected to expand at a compound annual growth rate (CAGR) of 7.63%.
The biopharma industry now has the most extensive and varied clinical pipeline to date, thanks to decades of groundbreaking research. In 2012, there were 3,200 distinct medications under development; by 2022, that number had nearly doubled to 6,100. The average cost of producing a single treatment is over $1 billion, while just 14% of medications in clinical trials reach FDA clearance, according to MIT research. This could be a game-changer for AI. For instance, generative AI helps identify illness patterns in large data sets to determine the optimal medicine combinations while enabling researchers to investigate far more possible compounds than they could with conventional techniques. Additionally, according to PwC, AI-driven analytics and automation could cut operational costs by more than 30% and process timeframes by 60–70%.
In a similar vein, the market has grown significantly due to consumer interest in weight-loss medications like Ozempic and Wegovy. According to a recent study in the scientific journal Addiction, GLP-1 medications may reduce the prevalence of alcohol and opioid addiction by as much as 50%. Additionally, these medications are being evaluated for Alzheimer’s disease and other disorders that are frequently associated with obesity. The development of GLP-1s is becoming crucial for pharmaceutical businesses that want to be leaders in fields like cardiovascular and renal health.
Competition with the leading companies in the anti-obesity business, which is expected to grow to $130 billion by 2030, is no longer the main emphasis. The possibility for additional participants to enter the field is growing along with the possible applications of GLP-1s. For example, the Swiss business Roche entered the weight-loss drug sweepstakes last year when it paid up to $3.1 billion to acquire California-based Carmot Therapeutics. The corporation wants to “fast-track” its anti-obesity medicines to regain faith in its pipeline and take a share of the weight-loss market.
Challenges in Biotech Funding and the Shift Towards Cell and Gene Therapies
The pharmaceutical sector may appear to be flourishing at first glance. However, it has its own set of difficulties, just like every other industry. Compared to 2021, funding for biotech and pharmaceuticals fell by a sharp 48.6% last year. In 2022, the IPO market also saw a significant decline, with profits falling as a result of market volatility and instability. Many general investors were apprehensive of the spike in drug-developer initial public offerings (IPOs) in 2020 and 2021, which garnered about $46.5 billion, more than the total from the preceding eight years combined. Future initial public offerings (IPOs) are being closely watched due to the high-risk, high-reward nature of the biotech sector as well as macroeconomic and geopolitical issues that impact larger markets.
However, as of September 3, drug developers had raised $2 billion through initial public offerings (IPOs) this year, a 24% increase over the same period in 2023. However, according to BNN Bloomberg, over two-thirds of these funds were raised in the first two months as a result of a spike in new listings. However, pharma companies’ portion of U.S. IPO profits has decreased from 17% in February to 6.5%, with less than $800 million raised in the next six months.
Tim Hunt, CEO of the Alliance for Regenerative Medicine (ARM), emphasized increased funding in cell and gene therapies in 2024 in his opening remarks at the October 7 conference. Thirteen of the fifteen biggest pharmaceutical companies in the world by market capitalization, he said, now have an “active presence” in this area. Major pharmaceutical corporations are increasingly turning to cell and gene therapies to fill possible revenue shortages as many product patents are about to expire. Despite this enthusiasm, there has been a reduction in related patent filings, and the number of cell and gene therapy deals in the pharmaceutical industry fell by 38% in Q2 2024 compared to the same time in 2023. Nevertheless, the sector is appealing and should not be disregarded by investors.
A close-up of a staff member counting pills in a pharmaceutical warehouse.
Our Methodology
Our methodology involved selecting pharmaceutical sector stocks with a market capitalization exceeding $2 billion and a share price below $20. We then identified the stocks with the lowest share prices and verified their last closing prices using Yahoo Finance. Finally, we ranked these stocks in ascending order based on their closing price as of February 21st.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Here is our list of the 12 best low price pharma stocks to invest in right now.
12. Teva Pharmaceutical Industries Limited (NYSE:TEVA)
Share Price as of the Close of February 21: $16.74
Teva Pharmaceutical Industries Limited (NYSE:TEVA) is a global leader in the pharmaceutical industry which is primarily focused on generic drugs. As the largest generic drug manufacturer, the company offers over 3,500 products across various therapeutic areas. The company’s business model includes developing, manufacturing, and distributing both generic and specialty medicines worldwide. With a strong presence in North America, Europe, and other regions, the company reaches around 200 million people daily, producing 76 billion tablets and capsules annually. Due to its significant role in the generic drug market, Teva Pharmaceutical Industries Limited (NYSE:TEVA) is often considered one of the Best Low Price Pharma Stocks for investors looking for stability and value in the healthcare sector.
In 2024, Teva Pharmaceutical Industries Limited (NYSE:TEVA) made notable progress, contributing to both growth and financial stability. Key products like AUSTEDO, UZEDY, and AJOVY led revenue growth, with AUSTEDO seeing a 34% sales increase, UZEDY surpassing its sales target, and AJOVY growing by 18%.
Teva Pharmaceutical Industries Limited (NYSE:TEVA)’s innovative pipeline is promising, with late-stage products such as Duvakitug, Olanzapine, and ICS/SABA DARI progressing in clinical trials which adds to the company’s potential for future growth. The generics business also showed strong performance which is driven by improved product launches and operational efficiencies, while the company’s API business grew modestly.
For Q4 2024, Teva Pharmaceutical Industries Limited (NYSE:TEVA) reported revenue of $16.5 billion, a 9% year-over-year increase, along with a 9% rise in adjusted EBITDA and a 10% increase in non-GAAP EPS. This growth spanned all business segments: innovative products, generics, and API. The overall profitability improvement reflects effective expense management alongside strong revenue performance.
11. Organon & Co. (NYSE:OGN)
Share Price as of the Close of February 21: $15.49
Organon & Co. (NYSE:OGN) is a global healthcare and pharmaceutical company that is primarily focused on improving women’s health and well-being. Among the issues that are the focus of the company’s portfolio and innovation pipeline are bacterial vaginosis, breast cancer, contraception, endometriosis, menopause, polycystic ovarian syndrome (PCOS), and postpartum hemorrhage (PPH). The company provides a wide range of well-known medications in several therapeutic areas, biosimilars, and over 60 products and therapies for women’s health.
Organon & Co. (NYSE:OGN) has a strong range of products and is always trying to make them better. By 2025, Nexplanon, the company’s largest product, is expected to generate $1 billion in revenue. By acquiring Dermavant Sciences Ltd. in October 2024, the company added innovative treatments like VTAMA to its immuno-dermatology portfolio, creating additional revenue opportunities. The business recently declared that VTAMA (tapinarof) cream has received FDA approval to treat atopic dermatitis in adults and children aged two and up.
Organon & Co. (NYSE:OGN) has maintained control over operating expenses while encouraging expansion. As of November 2024, the company had generated approximately $700 million in free cash flow. Its strong cash flow allows it to make investments in high-potential assets and supports its dividend payments. The Board of Directors declared a quarterly dividend of $0.28 per share to show the company’s commitment to delivering value to shareholders while also focusing on future growth.
10. Takeda Pharmaceutical Company Limited (NYSE:TAK)
Share Price as of the Close of February 21: $14.06
Takeda Pharmaceutical Company Limited (NYSE:TAK) is a Japanese multinational pharmaceutical company focused on developing, manufacturing, and selling medications and medical devices across key therapeutic areas such as oncology, rare diseases, neuroscience, gastroenterology, plasma-derived therapies, and vaccines. The company prioritizes research and development to create transformative treatments for unmet medical needs, with notable products like ENTYVIO for gastrointestinal disorders and ADYNOVI for hemophilia in its portfolio.
A 2.5% increase in revenues to JPY 4,590.0 billion is anticipated by Takeda Pharmaceutical Company Limited (NYSE:TAK) in its fiscal year 2024 financial forecast because of favorable foreign exchange rates, robust company expansion, and slower generic erosion of VYVANSE in the US. Operating profit is predicted to increase by 29.8% to JPY 344 billion, while net profit is predicted to increase by 73.5% to JPY 118 billion.
According to Insider Monkey’s Q4 database, 16 hedge funds were bullish on Takeda Pharmaceutical Company Limited (NYSE:TAK), an increase from 12 funds in the last quarter. It stands tenth among Best Low Price Pharma Stocks.