3 Pharma Stocks That Could Make Your Grandchildren Rich


  • These are a few of the more promising pharma stocks to buy now. 
  • Eli Lilly (LLY): The company’s stock has risen more than 700% in the last five years. 
  • Novo Nordisk (NVO): The company’s weight loss drug has been approved for sale in China. 
  • Moderna (MRNA): This pharma concern has several promising drugs in its pipeline of new products. 
pharma stocks - 3 Pharma Stocks That Could Make Your Grandchildren Rich

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Pharmaceutical stocks have not set the world on fire, with a few exceptions. Since the pandemic ended, pharma stocks have largely fallen out of favor with investors amid declining sales and mixed financial results. Consequently, the S&P Pharmaceuticals Index is down 5% this year compared to an 18% gain in the benchmark S&P 500 Index.

While the poor performance is disappointing, a select few pharma stocks are defying the downward trend and actually rising. Several others look extremely promising and undervalued at current levels. This means there continue to be opportunities for investors within the pharmaceutical stocks subsector.

Here are three pharma stocks that could make your grandchildren rich.

Eli Lilly (LLY)

Eli Lilly (LLY) sign on corporate building with blue sky in background
Source: shutterstock.com/Michael Vi

It is difficult to talk about pharmaceutical stocks and wealth without mentioning Eli Lilly (NYSE:LLY). Few, if any, pharmaceutical stocks have performed better than shares of Eli Lilly. In the past five years, LLY stock has increased by 756%, including doubling over the last 12 months. Trading at nearly $1,000 per share, analysts and investors are calling for the company to split its stock.

The share price appreciation has been driven by the fact that Eli Lilly appears to have two new blockbuster drugs on its hands, both of which have been approved since last fall. The first is its weight loss drug, Zepbound, and the second is its Alzheimer’s treatment, Donanemab. The weight loss drug, in particular, has sent Eli Lilly’s sales into overdrive.

Those sales likely got a boost after a study in the medical journal JAMA Internal Medicine concluded that Eli Lilly’s weight loss medication leads to faster and greater weight loss than competing drugs.

Novo Nordisk (NVO)

Novo Nordisk logo on a corporate building. NVO stock
Source: joreks / Shutterstock.com

The other top-performing pharma stock is Novo Nordisk (NYSE:NVO), the other weight loss drug manufacturer and Eli Lilly’s main competitor. The company behind weight loss medication Wegovy has seen its share price rise nearly 500% over the last five years, including a year-to-date gain of 38%. While some recent studies have raised issues with the company’s weight loss medications, sales remain brisk.

Novo Nordisk also just received a huge catalyst for its sales and stock as authorities in China approved its weight loss drug for sale in the nation of 1.4 billion people. The country’s National Medical Products Administration has approved the weekly injectable
drug Wegovy to help with weight management. More than half of China’s population is considered overweight, according to the country’s National Health Commission.

To keep up with surging demand, Novo Nordisk is spending $4.1 billion to expand its manufacturing capacity in the U.S., building a new manufacturing plant in Clayton, North Carolina, that will be completed in 2027.

Moderna (MRNA)

Moderna logo is seen at the entrance to its headquarters in Cambridge, Massachusetts. Moderna, Inc., (MRNA) is an American pharmaceutical and biotechnology company.
Source: Tada Images / Shutterstock.com

The stock of biopharmaceutical company Moderna (NASDAQ:MRNA) has struggled since the pandemic ended. The company, which developed one of the leading vaccines against COVID-19, has seen its share price decline 75% from an all-time high reached in September 2021. The selloff resulted from declining sales of its COVID-19 shot and the company’s lack of commercially available medications.

However, management wants to change that with a new combination of the COVID-19/influenza vaccine in late-stage trials and several cancer vaccines. Also, the U.S. government recently awarded Moderna a $176 million contract to develop a bird flu vaccine for humans. The contract, issued by the U.S. Department of Health and Human Services, comes as avian influenza spreads in U.S. cattle herds, raising the risk of infection spreading to people.

The bottom line is that Moderna is one new medication away from its stock, potentially soaring, making it a good time to buy the stock, which has been down 5% in the last 12 months.

On the date of publication, Joel Baglole held a long position in LLY. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

Article printed from InvestorPlace Media, https://investorplace.com/2024/07/3-pharma-stocks-that-could-make-your-grandchildren-rich/.

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