As 2023 unfolds, the pharmaceutical space is blossoming with new opportunities, sparking curiosity for those looking to buy some pharma stocks. With the iShares Biotechnology ETF (NASDAQ:IBB) ticking upward, for the most part, this year, investors who dive into pharma stocks need to capitalize on the sector’s positive momentum.
Many experts suggest that we are in the golden age of biotechnology, with scientific breakthroughs transforming how we treat and prevent diseases. Hence, pharma stocks to buy present themselves as excellent defensive investments in a turbulent economy.
The global pharmaceutical industry could generate a jaw-dropping $1.16 trillion in sales this year, according to market research firm Statista. Moreover, it also forecasts a 5.4% annual sales growth through 2027, with oncology drugs alone set to rake in $202 billion in revenues alone.
Let’s look at three pharma stocks that could experience a rapid surge in demand this year, offering plenty of upside ahead.
Neurocrine Biosciences (NBIX)
Neurocrine Biosciences (NASDAQ:NBIX) is a trailblazer in the biopharma realm, making waves in the medical world with its innovative treatments for neurological and endocrine issues. With a robust portfolio covering Parkinson’s, depression, schizophrenia and cerebral palsy, it is poised to become a major player in the targeted therapy space.
The firm is growing on the back of INGREZZA, its popular tardive dyskinesia treatment. Tardive dyskinesia is an involuntary, repetitive body movement disorder, and INGREZZA has proven to be incredibly potent in treating the disease. Consequently, it accounted for roughly 98.6% of its fourth-quarter sales. Moreover, sales shot up 33% in the fourth quarter and 32% for the full year.
Moreover, Neurocrine boasts a robust pipeline of drugs, expecting to post late-stage data for programs covering congenital adrenal hyperplasia, focal Onset seizure and anhedonia in major depressive disorder. Additionally, its massive $1.2 billion cash hoard will be critical in advancing these drugs over time.
Merck (NYSE:MRK) is a biotechnology giant and ranks as the third-largest biotech in terms of net income. With more than 60 drugs and projects coursing through clinical development, Merck will continue to impress one and all with its blockbuster portfolio.
Over the years, it has been a remarkably consistent business generating 11.7% and 20.9% revenue and EBITDA growth, respectively, over the past five years. Moreover, its sales have grown by over 20% in the past year, significantly higher than its historical average. The above-average revenue growth is linked to the smashing success of its Covid-19 pill Lagevrio and its human papillomavirus (HPV) vaccine in the first couple of quarters last year.
Though growth rates normalized in the past few quarters, sales of its anti-cancer drug, Keytruda, remain as extraordinary as ever. The drug generated a staggering $5.5 billion out of its $13.8 billion in sales in the fourth quarter. On top of that, the firm’s insatiable appetite for innovation is evident with its pipeline covering chronic cough, heart failure, HIV-1 infection, and other diseases. Therefore, expect the firm to grow across both lines in the long run.
Alnylam Pharmaceuticals (ALNY)
Alnylam Pharmaceuticals (NASDAQ:ALNY) is another popular biotech player that is effectively carving out a niche for itself in the realm of RNA interference (RNAi) therapeutics. With a focus on genetic and rare diseases, it’s pushing the boundaries of RNAi-based treatments, and the results have been marvelous.
It currently has six commercial-stage therapies, three with breakthrough designations, and a robust mid-to-late-stage pipeline. Furthermore, this top healthcare growth stock showcases an impeccable track record of translating early-stage studies into sure-fire successes.
Additionally, with a staggering $2.2 billion cash reserve and a pipeline spanning polyneuropathy, Alzheimer’s and other rare diseases, the firm remains a dazzling gem, poised to redefine the future of RNAi therapeutics.
Results over the past couple of quarters are up by double-digit margins on its top line, with forward estimates at over 34.5%. Furthermore, Tipranks’ analysts predict LNY stock offers 23% upside from current levels.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.