We recently compiled a list of the 10 Best Mid-Cap Healthcare Stocks To Buy Now. In this article, we are going to take a look at where Intra-Cellular Therapies, Inc. (NASDAQ:ITCI) stands against the other mid-cap healthcare stocks.
Global Healthcare Market: Growth Projections, Challenges, and Tech-Driven Innovations
According to projections by ReportLinker, the market for healthcare services will increase from $7.5 trillion in 2022 to $7.975 trillion in 2023. Through 2027, it is projected to grow at a compound annual growth rate (CAGR) of 6.3%, or $9.8 trillion. Hospitals, digital health, and healthcare services are some of the segments that make up the global healthcare market. Between 2024 and 2029, the hospital market alone is expected to increase by 4.18% annually, reaching a market value of $5.19 trillion.
In December 2023, the World Health Organization reported that global healthcare spending hit a record $9.8 trillion in 2021, or 10.3% of global GDP. However, spending was unevenly distributed, with low-income countries experiencing a decline in government health spending, relying more on external aid. While 11% of the global population lived in countries spending less than $50 per person on health, high-income countries spent around $4,000 per capita. Despite rising public health spending during COVID-19, this growth is unlikely to continue as countries face economic challenges like slow growth, high inflation, and increased debt.
Dr Bruce Aylward, WHO Assistant Director-General, Universal Health Coverage, Life Course, said:
“Sustained public financing on health is urgently needed to progress towards universal health coverage. It is especially critical at this time when the world is confronted by the climate crisis, conflicts, and other complex emergencies. People’s health and well-being need to be protected by resilient health systems that can also withstand these shocks.”
The Centers for Medicare and Medicaid Services (CMS) estimates that national healthcare expenditures would grow at an average rate of 5.6% between 2027 and 2032, with spending on healthcare expected to reach an estimated $4.8 trillion in 2023.
The healthcare market is undergoing a tech-driven, patient-centered revolution. Telehealth, boosted by the pandemic, is now mainstream, with the global market valued at $60.15 billion in 2023 and expected to grow steadily. Precision medicine, driven by genomics, is set to become a $50.2 billion market by 2028, offering personalized treatments based on genetic makeup. AI is also transforming healthcare, with $31.5 billion in equity funding from 2019 to 2022 and potential annual US savings of $360 billion within five years. Remote patient monitoring (RPM) is rising, with the global market at $71.9 billion in 2023 and projected to grow, supported by wearable technology.
Our Methodology
In our methodology, we focused on selecting healthcare stocks with market capitalizations between $2 billion and $10 billion that also had a strong/moderate buy rating and high institutional ownership. After identifying these stocks, we ranked them in ascending order based on their number of hedge fund holders as of Q2 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).
A scientist in a lab coat working with petri dishes containing biopharmaceutical drugs.
Intra-Cellular Therapies, Inc. (NASDAQ:ITCI)
Hedge Fund Holders: 52
Intra-Cellular Therapies, Inc. (NASDAQ: ITCI) develops drugs for neuropsychiatric and neurological disorders, focusing on schizophrenia, bipolar disorder, and major depressive disorder. The primary catalyst for ITCI’s growth is the continued success and expansion of CAPLYTA. Initially approved for schizophrenia, CAPLYTA received additional FDA approval for bipolar depression in late 2021. This expanded indication has significantly increased the drug’s potential market size and revenue opportunities.
Sharon Mates, the Chairman of the board of directors at Intra-Cellular Therapies, Inc. (NASDAQ: ITCI) said in the Q2 earnings call transcript:
“We are pleased to report our strong progress in Q2 in addition to CAPLYTA’s impressive growth trajectory. During the quarter, we announced robust positive results from our two Phase III clinical trials in major depressive disorder or MDD. These results form the basis for an expanded label for CAPLYTA and we are on track to submit a supplemental NDA for CAPLYTA for the adjunctive treatment of MDD later this year. In addition, we continue to advance our broad development pipeline which I will discuss later. We are very pleased with the company’s progress. Our vision has been to establish CAPLYTA as a first choice treatment across multiple depressive disorders and we are well on our way to achieving this goal.”
As of Q2 2024, around 52 hedge fund holders held stakes in the stock with VenBio Select Advisor being the largest stakeholder with 3,000,000 shares worth $205,470,000. The stock holds a Strong Buy rating based on 14 Wall Street Analysts. The average price target is $96.77, ranging from $74.00 to $130.00, indicating a 32.06% increase from the current price of $73.28.
Overall ITCI ranks 1st on our list of the best mid-cap stocks to buy. While we acknowledge the potential of ITCI as an investment, 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 ITCI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
