Savvy investors who bet on Big Pharma stocks last year were rewarded with double-digit gains and hefty dividends. And here’s even better news: Global spending on medicine will reach a whopping $1.1 trillion by 2015, according to the IMS Health Institute.

But despite having strong fundamentals in a growth sector, drug company stocks face these three significant threats going forward:

Tougher Drug Regulations and Approvals. Under President Obama, the Food and Drug Administration has gotten a lot tougher, cracking down on everything from medical devices to sunscreen. This week, an FDA panel voted unanimously that Roche (PINK:RHHBY) and its top-selling cancer drug Avastin is ineffective as a breast cancer treatment because it offers few benefits and many side effects. While the FDA’s vote doesn’t remove Avastin from the market, without FDA approval, insurers are unlikely to pay for the $100,000 drug. Withdrawing approval for Avastin’s use as a breast cancer treatment could cost the drug maker about $1 billion annually.

Government is Pressuring Drug Companies to Cut Prices. Because of the U.S. health reform law, pharmaceutical companies are staring down a double-barreled shotgun: larger rebates on drugs sold to government health programs and a federal excise tax on branded drug companies. The problem might be worse in Europe, where the spiraling debt crisis is prompting governments to pressure drug companies for big price cuts.

Looming Expiration of High-Value Drug Patents. Last week, Moody’s offered up a negative outlook on the global pharmaceutical industry, predicting that earnings would slow this year and stall in 2012. One big reason for the gloomy forecast is the expiration of drug patents this year and next year. Loss of patents for blockbuster drugs like Pfizer’s (NYSE:PFE) Lipitor, Lilly’s (NYSE:LLY) Zyprexa and Bristol-Myers’ (NYSE:BMY) Plavix and others will cost Big Pharma about $30 billion a year in sales.

But that doesn’t mean it’s time to dump pharmaceutical stocks and look for something better. While the sector likely will not deliver the stellar performance of the past year or so, the right drug companies will continue to deliver mid-to-high single-digit growth while offering healthy dividends. Here are two pharma stocks that are hot and two that are lukewarm:

Hot

AstraZeneca (NYSE: AZN). At $49.52, AZN is trading 10% above its 52-week low of $44.17 last June. The stock pays a whopping 7.6% dividend yield and has a price-to-earnings growth ratio of 27.48 – usually an indicator that the stock is overvalued. Still, it has $10.8 billion in cash compared to debt of $9.6 billion – a total debt/equity of 42.55. The Edge: FDA approval this spring of AZN’s thyroid cancer drug, Vandetanib.

Eli Lilly. At $37.33, Lilly is trading more than 15% above its 52-week high of $32.82 last July. The stock pays a 5.3% dividend yield and has a PEG ratio of -1.86. That negative PEG normally is a sign to be cautious because it points to an expected decline in earnings. Still, Lilly has $6.71 billion in cash compared to $6.67 billion in debt — a total debt/equity of just 47.88. The Edge: Lilly announced plans this week to ramp up its biotech R&D efforts to produce two-and-one drugs for diseases that require more than one drug.

Lukewarm

GlaxoSmithKline (NYSE: GSK). At $42.49, GSK is trading 28% above its 52-week low of $33.55 last July. GSK has taken some hits recently over production problems at a Puerto Rico plant, but the company is righting the ship. The stock pays a 5.1% dividend yield and has an attractive price-to-earnings growth ratio of 0.98. GSK is carrying a lot of debt, however: $24.12 billion versus $10.66 billion in cash – a total debt/equity of 152.59. The Edge: GSK’s lead pipeline drug Relovair, which treats severe breathing disorders.

Bristol-Myers. At $28.61, BMY is trading 28% over its 52-week low of $24.22 last July. BMY stock pays a 4.60% dividend yield and has a PEG ratio of -8.09, another caution about future earnings growth. The company does have $6.79 billion in cash compared to $5.43 billion in debt – a total debt/equity of 34.14. The Edge: FDA’s approval this spring of the company’s new immune system-boosting melanoma drug Yervoy.

As of this writing, Susan J. Aluise did not hold a position in any of the stocks mentioned here.