In this article, we will be taking a look at the 12 most profitable pharmaceutical stocks right now.
The Pharmaceutical Industry: Growth, Innovation, and Emerging Challenges
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, due 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. To identify the optimum medicine combinations, generative AI, for instance, helps researchers identify illness patterns in large data sets and explore a far greater number of possible compounds than traditional approaches can. 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-1 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 of additional participants entering the field is growing along with the possible applications of GLP-1s.
The pharmaceutical industry faces challenges despite appearing robust. Biotech and pharma funding dropped 48.6% in 2022 compared to 2021, with IPO proceeds also declining amid market volatility. While 2020 and 2021 saw drug-developer IPOs raise $46.5 billion, surpassing the previous eight years combined, investor caution has increased. In 2024, drug developers raised $2 billion through IPOs by September 3, a 24% year-over-year increase. However, two-thirds of these funds came early in the year, with proceeds falling sharply later, reducing their share of U.S. IPO proceeds from 17% in February to 6.5%.
In his October 7 remarks, Tim Hunt, CEO of the Alliance for Regenerative Medicine, highlighted increased 2024 investment in cell and gene therapies, noting that 13 of the 15 largest pharma companies are active in this space. With numerous patents expiring, these therapies offer potential revenue opportunities. However, Q2 2024 saw a 38% drop in cell and gene therapy deals compared to 2023, alongside fewer patent applications. Despite these challenges, the field remains a strong investment prospect.
A closeup of pills in a pharmacy, representing the high quality medications of the company.
Our Methodology
Our methodology focuses on identifying high-growth stocks by applying a rigorous Stock Analysis filter. We considered companies with positive net income growth for 5 years and then ranked them accordingly. We also measured hedge fund sentiment around each stock according to Insider Monkey’s database of 900 as of Q3 2024.
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 12 most profitable pharmaceutical stocks right now.
12. Novartis AG (NYSE:NVS)
Net Income Growth 5Y: 8.32%
Novartis AG (NYSE:NVS) is a leading global healthcare company based in Switzerland, recognized for its innovative pharmaceutical products and commitment to improving patient outcomes. The company primarily focuses on developing and manufacturing prescription medications across various therapeutic areas, including oncology, cardiovascular diseases, immunology, and neuroscience.
In the third quarter of 2024, Novartis AG (NYSE:NVS) reported a 10% increase in net sales. This growth was fueled by strong demand for key products, including Entresto and Cosentyx, which saw sales increases of 26% and 28%, respectively. The company also achieved a 20% rise in core operating income, with a core margin climbing to 40.1%, marking a 340 basis point improvement year-over-year. Core earnings per share (EPS) rose to $2.06, reflecting an increase of 20% compared to the previous year.
For the first nine months of 2024, Novartis AG (NYSE:NVS) reported an 11% growth in net sales and a similar 20% increase in core operating income. The core EPS for this period was $5.83, up 21%, and free cash flow reached a record $12.6 billion, up 15% year-over-year. The company recently received FDA approval for early breast cancer treatment, which could potentially triple its addressable market.
As tracked by the Insider Monkey database, 24 hedge fund holders held shares in Novartis AG (NYSE:NVS) in Q3 2024, with Renaissance Technologies being the largest stakeholder with shares worth roughly $264.6 million.
11. AbbVie Inc. (NYSE:ABBV)
Net Income Growth 5Y: 9.47%
AbbVie Inc. (NYSE:ABBV) is a global biopharmaceutical company that specializes in the development, manufacture, and marketing of a wide range of pharmaceutical products. The company focuses on several key therapeutic areas, including immunology, hematologic oncology, aesthetics, neuroscience, eye care, and other key products.
AbbVie Inc. (NYSE:ABBV) reported strong Q3 2024 results, surpassing market expectations with EPS of $3, above the forecasted $2.92. This performance led the company to raise its full-year EPS guidance to $10.90–$10.94. Their revenue growth was also robust, exceeding expectations by $260 million which was driven by an 18% increase in the ex-Humira platform.
The company’s key products like Skyrizi and Rinvoq excelled, with combined sales expected to exceed $17 billion in 2024. Skyrizi’s sales rose 51.5% to $3.2 billion, while Rinvoq grew 47.4% to $1.6 billion. AbbVie Inc. (NYSE:ABBV)’s oncology sector saw an 18.2% growth in Venclexta sales, while neuroscience revenues increased 16% which was supported by Vraylar and Botox Therapeutic. Aesthetics also grew modestly, with Botox Cosmetic sales up 6.5% in the U.S.
AbbVie Inc. (NYSE:ABBV)’s revenue drivers include the strong performance of key products like Skyrizi and Rinvoq, strategic acquisitions like Cerevel Therapeutics enhancing the neuroscience pipeline, and recent regulatory approvals for treatments like Vyalev and Botox. These factors, alongside pipeline advancements and global market expansion, make AbbVie Inc. (NYSE:ABBV) stand among the most profitable stocks in the pharmaceutical sector.
Street analysts hold a consensus Moderate Buy rating on the stock, with an average 12-month price target of $205.82. The projections range from a high of $240 to a low of $165, indicating a potential 12.42% upside from the current price of $183.08.
10. Zoetis Inc. (NYSE:ZTS)
Net Income Growth 5Y: 10.71%
Zoetis Inc. (NYSE:ZTS) is a global animal health company that focuses on the discovery, development, manufacture, and commercialization of medicines, vaccines, and diagnostic products and services for animals. Essentially, the company creates and sells a wide range of products designed to improve the health and well-being of both companion animals (like dogs and cats) and livestock (such as cattle, pigs, and poultry).
Zoetis Inc. (NYSE:ZTS) reported strong financial results for Q3 2024, showcasing a 14% operational revenue growth. U.S. revenue rose by 15%, while international revenue increased by 13% which was driven by the company’s innovative companion animal portfolio, which grew 15% operationally, and an 11% operational increase in the livestock segment. The corporation’s total revenue reached $2.4 billion, with growth split between an 8% contribution from volume and 6% from price increases.
Zoetis Inc. (NYSE:ZTS)’s key drivers included Zoetis’ osteoarthritis pain franchise, with Librela and Solensia generating $151 million in global revenue, the Simparica franchise adding $333 million, and the dermatology franchise contributing $449 million. These products underline the company’s focus on addressing unmet needs in the animal health market.
Zoetis Inc. (NYSE:ZTS)’s profitability was also a highlight, with adjusted net income growing 15% operationally to $716 million. This reflects the company’s ability to efficiently convert revenue growth into profits through strong operational and pricing strategies.
Over the years, Zoetis has demonstrated consistent double-digit operational revenue growth, supported by innovative products like Librela, which became the fourth-largest U.S. pet care product within 11 months of its launch, and Simparica Trio, the top vet-prescribed parasiticide. These successes underline Zoetis’ market leadership and ability to drive long-term growth.
As of Q3 2024, 62 hedge funds included Zoetis Inc. (NYSE:ZTS) in their portfolios, according to data from the Insider Monkey database. Reflecting this positive sentiment, analysts have given the stock a consensus Strong Buy rating.
9. SIGA Technologies, Inc. (NASDAQ:SIGA)
Net Income Growth 5Y:
SIGA Technologies, Inc. (NASDAQ:SIGA) is a commercial-stage pharmaceutical company that specializes in the health security market, particularly in the United States. It is one of the best profitable stocks in the pharmaceutical industry.
In the third quarter of 2024, SIGA Technologies, Inc. (NASDAQ:SIGA) reported strong financial performance which was driven by robust procurement orders and diverse revenue sources. The company secured $122 million in procurement orders, surpassing the previous year’s performance. Key revenue drivers included $53 million in product sales, with $23 million from oral TPOXX and $17 million from IV TPOXX sales to the US Government, as well as $12 million from international sales. SIGA Technologies, Inc. (NASDAQ:SIGA) also earned $4 million in research and development revenues.
The growth is primarily attributed to increased demand for TPOXX, its antiviral drug for smallpox and orthopoxviruses, with a $112.5 million order from the US Government under the 19C contract. The corporation achieved a pre-tax operating income of $13 million which is a notable improvement from a loss last year, and net income of $13 million for the nine months ending September 30, 2024, with a fully diluted income per share of $0.19.
Looking ahead, SIGA Technologies, Inc. (NASDAQ:SIGA) is preparing for a new long-term agreement with the US Government in 2025 and is expanding internationally, with a recent sale of TPOXX to Morocco marking its entry into Africa. Additionally, the company is developing monoclonal antibodies in collaboration with Vanderbilt University which is supported by funding from the US Department of Defense, which could open new growth opportunities.
8. Dr. Reddy’s Laboratories Limited (NYSE:RDY)
Net Income Growth 5Y: 14.80%
Dr. Reddy’s Laboratories Limited (NYSE:RDY) operates as an integrated pharmaceutical company, meaning it is involved in various stages of the pharmaceutical supply chain. The company’s main activities include the manufacture and marketing of prescription and over-the-counter (OTC) finished pharmaceutical products, active pharmaceutical ingredients (APIs), and intermediates.
In Q2 FY 2025, Dr. Reddy’s Laboratories Limited (NYSE:RDY) reported strong financial performance with consolidated revenues of INR 8,016 crores, reflecting a 17% year-over-year and 4% sequential growth. This growth was driven by contributions from North America (16% growth) and emerging markets (20% growth). The gross profit margin improved to 59.6%, up 92 basis points, due to better product mix and manufacturing efficiency, despite some price erosion in the generics market.
The company’s operating expenses rose 20% to INR 2,301 crores, mainly due to investments in new initiatives, higher freight costs, and acquisition-related expenses. R&D spending increased by 33% to INR 727 crores, supporting the development of its pipeline. EBITDA reached INR 2,280 crores, with a margin of 28.4%, while the profit before tax was INR 1,917 crores, showing a 25.7% margin after excluding one-time costs.
Street analysts hold a consensus Moderate Buy rating on Dr. Reddy’s Laboratories Limited (NYSE:RDY), with an average price target of $17.00. This target reflects a 20.74% potential upside from the current price of $14.08, with both the high and low price forecasts also set at $17.00.
7. Elanco Animal Health Incorporated (NYSE:ELAN)
Net Income Growth 5Y: 16.93%
Elanco Animal Health Incorporated (NYSE:ELAN) is a global leader in the animal health industry, specializing in the development, manufacture, and marketing of products that improve the health and well-being of animals. The company’s portfolio includes a wide range of pharmaceuticals, vaccines, and nutritional products designed for both companion animals (pets) and farm animals.
In Q3 2024, Elanco Animal Health Incorporated (NYSE:ELAN) reported revenue of over $1 billion, showing a 1% organic constant currency growth but a 4% decline on a reported basis due to the divestiture of its aqua business and unfavorable foreign exchange rates. Growth was driven by new product approvals, including Zenrelia and Credelio Quattro in the pet health segment, and strong performance in the farm animal segment, particularly in U.S. cattle and poultry sales.
The company’s gross profit was $538 million (52.2% of revenue), a 220-basis point decline compared to the previous year. Adjusted EBITDA was $163 million (15.8% of revenue), down 24% from Q3 2023, partially offset by improved pricing and cost savings. Net income was $364 million, boosted by a $640 million pre-tax gain from the divestiture, while adjusted net income was $66 million ($0.13 per share).
Elanco Animal Health Incorporated (NYSE:ELAN) revised its full-year 2024 guidance, expecting revenue between $4.42 and $4.45 billion with 3% organic constant currency growth, adjusted EBITDA between $900 to $930 million, and adjusted EPS between $0.89 to $0.95.
As of Q3 2024, 42 hedge funds included the company in their portfolios, according to data from the Insider Monkey database. The largest stakeholder in the company was Magnetar Capital with holdings worth $155.3 million.
6. Novo Nordisk A/S (NYSE:NVO)
Net Income Growth 5y: 19.59%
Novo Nordisk A/S (NYSE:NVO) is a Danish multinational pharmaceutical company that specializes in the discovery, development, and delivery of innovative biological medicines. The company’s primary focus is on treating serious chronic diseases, particularly diabetes, obesity, and rare blood and endocrine disorders.
In Q3 2024, Novo Nordisk A/S (NYSE:NVO) reported strong financial performance, with a 24% sales growth and a 22% operating profit growth in the first nine months of the year. This growth was driven by increased demand across North America and international markets, particularly in diabetes treatments (26% growth in GLP-1 sales) and obesity care (44% growth, fueled by Wegovy’s 77% sales increase).
The company’s operating profit growth reflects efficient commercial execution and cost management despite higher investments in capital expenditures. However, total carbon emissions rose by 34% due to scaling operations.
Over the past three years, Novo Nordisk A/S (NYSE:NVO) has tripled its patient reach for GLP-1 treatments, now serving 11.5 million patients globally. The corporation also achieved a 33.9% global market share in diabetes, surpassing its 2025 goal. A recent trial for oral semaglutide showed a 14% reduction in major cardiovascular events, which could lead to an expanded cardiovascular label, strengthening its market position.
As of Q3 2024, 61 hedge funds had the company in their portfolios, based on data from the Insider Monkey database. The largest shareholder was Fisher Asset Management, with holdings valued at $1.5 billion. Street analysts have a consensus rating of Moderate Buy for the stock.
5. Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH)
Net Income Growth 5Y: 24.93%
Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) is a biopharmaceutical company that specializes in the development, manufacturing, marketing, and sale of generic and proprietary injectable, inhalation, and intranasal products. The company operates primarily in the United States, China, and France. AMPH is one of the most profitable stocks on our list.
In Q3 2024, Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) reported net revenues of $191.2 million, a 6% year-over-year increase, driven by strong sales of products like Primatene Mist ($26.1 million), BAQSIMI ($40.4 million), and the launch of Albuterol MDI. Primatene Mist is on track for $100 million in annual sales by the end of 2024, and the corporation plans to expand the BAQSIMI market and strengthen its sales force.
Despite a decrease in adjusted net income to $49.6 million ($0.96 per share) due to lower gross margins (53% vs. 60% in 2023) and higher operating expenses, the company generated $60 million in cash flow and repurchased $35 million worth of shares. Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) also announced a $50 million share buyback program. Ongoing discussions with the FDA regarding its insulin pipeline are expected to drive future growth.
Street analysts hold a consensus Strong Buy rating on the stock, with an average price target of $63.67 (high: $70, low: $55), implying a 40.89% upside from the current price of $45.19.
4. AstraZeneca PLC (NASDAQ:AZN)
Net Income Growth 5Y: 25.87%
AstraZeneca PLC (NASDAQ:AZN) is a British-Swedish multinational pharmaceutical and biotechnology company. The company is primarily involved in the research, development, manufacture, and sale of pharmaceutical and biotechnology products. It focuses on treating a wide range of diseases, including oncology, cardiovascular, gastrointestinal, infection, neuroscience, respiratory, and rare diseases. It also develops vaccines and immune therapies, aiming to deliver life-changing treatments and preventions.
AstraZeneca PLC (NASDAQ: AZN) is one of the most profitable stocks right now. In Q3 2024, the company’s revenue grew 21%, with all focus therapy areas achieving double-digit growth. Core EPS rose 27% to $2.08, driven by a 19% increase in product sales. The U.S. accounted for 43% of revenue, while emerging markets outside China contributed 14%, surpassing China’s 13%. Alliance revenue also grew 50% to $1.5 billion, boosted by sales of Enhertu and Tezspire.
AstraZeneca PLC (NASDAQ:AZN)’s oncology segment grew 22% to $16 billion in the first nine months which was driven by flagship products like Tagrisso and Enhertu. High-value Phase 3 readouts, including LAURA, offer over $5 billion in revenue potential. A $3.5 billion U.S. investment in manufacturing and R&D underscores the company’s focus on innovation and growth.
The corporation’s global presence, with 30% growth in emerging markets outside China, remains a key strength. Despite challenges in China, AstraZeneca PLC (NASDAQ:AZN) continues investing in the region. Recent regulatory approvals in the U.S., Europe, and China are expected to drive growth and solidify the company’s leadership in the pharmaceutical market.
As of Q3 2024, 42 hedge funds held shares in AstraZeneca PLC (NASDAQ:AZN), according to the Insider Monkey database. The largest shareholder in the company was Fisher Asset Management with shares worth $816.5 million. Analysts maintain a consensus Strong Buy rating for the stock, with an average price target of $87.67—ranging from $87.00 to $88.00—indicating a potential 29.65% increase from its recent price of $67.62.
3. Takeda Pharmaceutical Company Limited (NYSE:TAK)
Net Income Growth 5Y: 28.35%
Takeda Pharmaceutical Company Limited (NYSE:TAK) is a leading global biopharmaceutical company with a rich history dating back to 1781. It is the third-largest pharmaceutical company in Asia. The company’s core mission is to discover and deliver life-transforming treatments across several therapeutic areas, including oncology, rare diseases, neuroscience, gastroenterology, plasma-derived therapies, and vaccines.
Takeda Pharmaceutical Company Limited (NYSE:TAK) is emerging as one of the most profitable stocks because of its robust financial performance and strategic growth initiatives. In Q2 2025, the company reported a 5% revenue growth at constant exchange rates (CER), reaching ¥2.4 trillion for the first half of FY 2024, with core operating profit up 22.3% (12.9% at CER) and core EPS at ¥310. The corporation’s key growth drivers include its Growth & Launch portfolio, which grew 18.7% at CER and now accounts for 47% of total revenue. Products like ENTYVIO and new launches such as FRUZAQLA and ADZYNMA have exceeded expectations, supported by geographical expansion and efficiency programs. With a strong market position, ENTYVIO’s peak sales projected at $7.5–$9 billion, and FRUZAQLA gaining a 29% share in metastatic colorectal cancer treatment, the corporation is poised for continued growth.
Street analysts hold a Moderate Buy rating on the stock, with a 12-month price target of $14.80, representing a 9.79% increase from its current price of $13.48.
2. Lantheus Holdings, Inc. (NASDAQ:LNTH)
Net Income Growth 5Y: 65.43%
Lantheus Holdings, Inc. (NASDAQ:LNTH) is a leading company in the biopharmaceutical sector, specializing in diagnostic imaging agents and therapeutics. Founded in 1956 and headquartered in North Billerica, Massachusetts, the company focuses on developing, manufacturing, and commercializing innovative products primarily used in cardiology and oncology.
Lantheus Holdings, Inc. (NASDAQ:LNTH) has emerged as one of the most profitable stocks because of its strong performance in the radiopharmaceutical sector and impressive financial results. In the third quarter of 2024, the company reported consolidated net revenue of $378.7 million, marking an 18.4% increase year-over-year. GAAP fully diluted earnings per share reached $1.79, with adjusted EPS at $1.70, reflecting a 15.6% increase. The company also achieved a gross profit margin of 68.2%, an improvement of 109 basis points, and an operating profit of $165.1 million, up 18.3% from the previous year.
Key growth drivers include the success of PYLARIFY, Lantheus Holdings, Inc. (NASDAQ:LNTH)’ PSMA PET imaging agent. In Q3 2024, PYLARIFY generated approximately $260 million in net sales, up 20% year-over-year, and it maintains market leadership as the number one PSMA PET imaging agent. With projected sales exceeding $1 billion, PYLARIFY is on track to achieve blockbuster status in 2024. Additionally, DEFINITY, the company’s ultrasound enhancing agent, reported Q3 net sales of $77 million, a 14% increase from the previous year, benefiting from competitor supply challenges that resulted in higher market share.
Looking ahead, Lantheus Holdings, Inc. (NASDAQ:LNTH) is well-positioned to capitalize on expanding markets, particularly in Alzheimer’s diagnostics. The U.S. market for Alzheimer’s radio diagnostics is projected to reach $1.5 billion by the end of the decade and $2.5 billion by the mid-2030s. The company is also advancing its late-stage pipeline with MK-6240 and NAV-4694, radio diagnostics for Alzheimer’s disease, which further enhance its growth potential.
As tracked by the Insider Monkey database, 35 hedge fund holders held shares in Lantheus Holdings, Inc. (NASDAQ:LNTH) in Q3 2024, with Farallon Capital being the largest stakeholder with shares worth $324.4 million. Street analysts hold a consensus Strong Buy rating on the stock.
1. Neurocrine Biosciences, Inc. (NASDAQ:NBIX)
Net Income Growth 5Y: 78.87%
Neurocrine Biosciences, Inc. (NASDAQ:NBIX) is a prominent neuroscience-focused biopharmaceutical company dedicated to developing treatments for neurological, neuroendocrine, and neuropsychiatric disorders. The company is known for its innovative approach to addressing complex diseases that often have limited treatment options. The corporation’s product portfolio includes FDA-approved therapies for conditions such as tardive dyskinesia, Huntington’s disease chorea, endometriosis, and uterine fibroids, developed in collaboration with AbbVie.
Neurocrine Biosciences, Inc. (NASDAQ:NBIX) reported strong financial results in Q3 2024, with INGREZZA delivering $613 million in sales, marking a 25% year-over-year growth. This growth is attributed to increased patient demand and expanded market reach for treating Tardive Dyskinesia and Huntington’s Disease Chorea. Despite missing earnings expectations with an EPS of $1.24 against the expected $1.51, the company has maintained a positive outlook due to its strategic investments and pipeline development. The company’s focus on high-value pipeline assets and strategic capital allocation supports its long-term profitability.
Neurocrine Biosciences, Inc. (NASDAQ:NBIX) has announced a $300 million share repurchase plan, indicating confidence in its undervalued stock and commitment to returning capital to shareholders.
As of Q3 2024, 49 hedge funds included the company in their portfolios, according to data from the Insider Monkey database. Analysts on Wall Street have given the stock a consensus rating of “Strong Buy,” with a 12-month average price target of $166.53. Price projections range from $121.00 to $192.00, suggesting a potential upside of 31.01% from its current trading price of $127.11.
Overall, NBIX ranks first among the 12 most profitable pharmaceutical stocks right now. While we acknowledge the potential of pharmaceutical companies, 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 NBIX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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