7 of the Best Pharma Stocks to Buy Now

pharma stocks - 7 of the Best Pharma Stocks to Buy Now

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During the past year, there was a justifiable obsession with the race to a vaccine for the novel coronavirus. And the companies in that race were making headlines constantly, with prices for longshots soaring and even the big players were riding the tide.

But there are a couple realities to vaccine production. First, vaccines aren’t big money makers. And as you can see by the recent proposal from President Biden, the intellectual property may well be distributed for free to rid the globe of the pandemic.

This was always the story for people who understood how pharma stocks work. You get broad distribution of a vaccine, but the margins are very slim. If you want to make money in the pharma sector, you need to find a therapy for something everyone has or very few people have. That’s where the margins are and the long-term growth of a company.

Now that vaccinations are almost off the front page, here are seven of the best pharma stocks to buy now.

  • Horizon Therapeutics (NASDAQ:HZNP)
  • ImmunityBio (NASDAQ:IBRX)
  • I-Mab (NASDAQ:IMAB)
  • Mind Medicine (NASDAQ:MNMD)
  • Sage Therapeutics (NASDAQ:SAGE)
  • SpringWorks Therapeutics (NASDAQ:SWTX)
  • Allakos (NASDAQ:ALLK)

Pharma Stocks to Buy: Horizon Therapeutics (HZNP)

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While 97% of its sales are in the U.S., HZNP is one of those pharmaceuticals that moved its operations to Ireland for favorable tax status. With a $20 billion market cap, it’s one of the biggest pharma stocks on our list.

What’s more, it has a handful of drugs already in the market, earning money. HZNP focuses on rheumatic diseases as well as rare and orphan diseases. The rheumatic diseases like gout, mean long-term therapies as do the rare diseases. And the rare diseases usually only have one or two drugs to treat them, although their patient pool is small.

But the big thing with HZNP is, it already has drugs in the marketplace and that’s a big deal because getting drugs approved is costly and time-consuming. That’s a distinct competitive advantage. It also has a solid pipeline.

HZNP stock is up 18% year to date. It has an ‘A’ rating in my Portfolio Grader.

ImmunityBio (IBRX)

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The one holy grail of vaccines — essentially therapeutic drugs that activate the human immune system to fight diseases — is that they’re potentially useful against any number of issues beyond viruses. Take, for example, cancer.

IBRX is one of the pharma stocks that is taking immuno-therapies to the next level. What’s more, it was actually accepted in Operation Light Speed for its Covid-19 vaccine. And it’s still working with the South African government on a distribution plan for the drug that currently in phase 1 trials.

It has a $6 billion market cap after a healthy run in 2020, and is up 21% year to date. The added investment capital will help boost research and development.

It has an ‘A’ rating in my Portfolio Grader.

Pharma Stocks to Buy: I-Mab (IMAB)

a scientist with protective equipment and microscope in a lab JAGX stock

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One of the big long-term themes in the markets is the rise of China. Within the next decade or less, it’s going to overtake the U.S. as the largest economy in the world. And given its history with the West going back to the Opium Wars and beyond, it is very motivated to create its own economy and not rely on the West to provide its products, science, engineering and technology.

For investors, that means it’s wise to find good China-based firms that are making headway in China and the global markets. IMAB is one of them and is becoming one of the world’s pharma stocks to pay attention to.

IMAB is a development stage biotech that focuses on immuno-oncology and immuno-inflammation. It has drugs in phase 2/3 trials China a couple in phase 1 trials in the U.S.

It has a $4 billion market cap and offers exposure to one of the fastest growing pharma markets in the world. IMAB is up 25.8% year to date.

Mind Medicine (MNMD)

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If you’re looking to take a step beyond in your portfolio, MNMD, colloquially known as MindMed may be just the ticket.

It is working in the U.S. and Europe in a sector most pharma stocks haven’t even thought about exploring — psychedelics as drug therapies for addiction, depression, PTSD, adult ADHD and anxiety. It has ongoing research in Basel, Switzerland, the birthplace of LSD, as well as the University of Maastricht in the Netherlands and New York University.

For many decades research into these drugs was strictly forbidden in the U.S. by law and U.S. institutions couldn’t get government funding for independent research. But that is all changing and decades of research from abroad is now being confirmed in recent studies.

MNDM only has a market cap of $3 million and is trading near the bottom of its 52-week range. It’s speculative but may be worth some risk capital if you believe in this therapeutic concept.

It has an ‘A’ rating in my Portfolio Grader.

Pharma Stocks to Buy: Sage Therapeutics (SAGE)

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If psychedelics aren’t your thing, but you’re interested in drugs to help with mental health issues, then SAGE may be of interest to you.

While there are plenty of pharma stocks that offer typical treatments for depression and other chronic mental health issues, SAGE is exploring a new and broader effort to address neuroscience drug development that also includes treatments for Parkinson’s, Alzheimer’s and Huntington’s diseases.

Zulresso is its first drug out of trials and it’s focused on post-partum depression. But SAGE has a number of trials underway and is partnered with a major drug company for two of its drugs, which are progressing nicely.

SAGE stock is off 11% year to date, trading at a current P/E of 6, with a $4 billion market cap. Tempting.

It has an ‘A’ rating in my Portfolio Grader.

SpringWorks Therapeutics (SWTX)

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Launched in 2017, SWTX is a clinical-stage biopharmaceutical company that focuses on rare diseases and cancers. It has partnerships with a number of major pharma companies on its work in multiple myeloma and tumor therapies. It’s currently in phase 3 clinical trials for its drug to treat desmoid tumors (debilitating and disfiguring soft tumors).

SWTX has eight drugs and combination therapies in trials and one in preclinical trials. And most of trials are sponsored by a major pharma company, which is a good sign the therapy has potential.

Also, with a $3 billion market cap, it’s an attractive target for an acquisition by one of the larger pharma companies it’s working with.

The stock is up 2% year to date and like most clinical-stage pharma stocks, it’s a pure play on its pipeline now, rather than revenue. That’s also where big partners help manage burn and drug rollout.

It has an ‘A’ rating in my Portfolio Grader.

Pharma Stocks to Buy: Allakos (ALLK)

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This clinical-stage biotech develops antibodies to help treat allergic, inflammatory and proliferative diseases. The latter basically means any disease where the cells grow in number rapidly, like tumor growth. ALLK’s most advanced trials are focused on eosinophilic gastrointestinal diseases (EGIDs).

There are a number of different conditions that would benefit from ALLK’s work in this area and its approach is fairly unique for pharma stocks exploring these treatment areas.

ALLK has had a wild 52-week ride, from a low around $60 to a high around $158. ALLK stock is off 32% year to date and sits around $90 at this point. It has a $5 billion market cap, so it’s a potential buyout target as well … if its drugs work out.

It has a ‘B’ rating in my Portfolio Grader.

On the date of publication, Louis Navellier has a position in HZNP in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. 

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

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