The pharmaceutical market is experiencing steady growth, driven by increasing demand for innovative treatments amid an aging population and rising prevalence of rare and chronic diseases. Continued research and development (R&D) innovation resulting in the discovery and development of new drugs and treatment options would boost the industry’s prospects.
Considering these factors, investors could consider buying top pharmaceutical stocks Pacira BioSciences, Inc. (PCRX), Calliditas Therapeutics AB (publ) (CALT), and Astellas Pharma Inc. (ALPMY) poised for significant growth.
The global pharmaceutical market is projected to reach $1.16 trillion this year, with oncology drugs segment leading at $214.10 billion. By 2028, the global pharma market is expected to grow at a CAGR of 6.2%, reaching $1.47 trillion. The United States is also anticipated to lead globally, generating the highest revenue of $636.90 billion in 2024.
Besides, driven by rising chronic diseases, a rapidly aging population, and the availability & utilization of innovative therapeutics in developed markets, IQVIA reported an increase in global medicine use by 12%, with an annual use projected at 3.80 trillion defined daily doses. Spending on medicine is forecasted to grow by 38% through 2028.
As a result, global spending on medicines is projected to reach $2.30 trillion by 2028. This represents a significant growth trajectory, with spending expected to exceed pre-pandemic levels and biotechnology accounting for 39% of global spending, reaching over $892 billion by 2028.
Furthermore, the biopharma industry is booming due to the growing demand for personalized medicines and several advancements in biotechnology, including biologics, gene editing, cell therapy, and the integration of bioinformatics and data analytics into drug discovery and development processes.
The global biopharma market is estimated at $516.79 billion in 2024 and is expected to grow at a CAGR of 8.1% to reach $761.80 billion by 2029.
Considering these conducive trends, let’s examine the fundamentals of three Medical – Pharmaceuticals stock picks, beginning with the third choice.
Stock #3: Pacira BioSciences, Inc. (PCRX)
PCRX focuses on developing and marketing non-opioid pain management and regenerative health solutions for healthcare professionals in the United States. Its products include EXPAREL, ZILRETTA, and the iovera system, offering innovative alternatives to traditional opioid-based treatments.
On March 13, 2024, PCRX announced that the FDA granted Regenerative Medicine Advanced Therapy (RMAT) designation to PCRX-201, a gene therapy for osteoarthritis of the knee. Preliminary clinical findings suggest potential as a disease-modifying therapy, with well-tolerated and promising efficacy observed in a Phase 1 trial.
On February 7, PCRX announced that it had secured a national group purchasing agreement for EXPAREL with Premier, Inc. (PINC), effective January 1, 2024, enabling Premier members to access special pricing for the non-opioid pain management solution.
This collaboration aims to enhance patient care, reduce opioid reliance, and optimize cost savings for healthcare organizations.
PCRX's total revenues increased 5.4% year-over-year to $181.24 million in the fourth quarter that ended December 31, 2023. The company's non-GAAP net income and net income per common share grew 22% and 21.9% from a year-ago quarter to $45.11 million and $0.89, respectively. Moreover, its adjusted EBITDA rose 11.3% from the prior-year quarter to $65.39 million.
The company forecasts total revenue to be between $680 million and $705 million for the fiscal year 2024, alongside a projected non-GAAP gross margin of 74% to 76%.
Analysts predict PCRX's revenue and EPS will grow by 3.7% and 27.8% year-over-year to $166.30 million and $0.68, respectively, for the fiscal first quarter ending March 2024. Also, the company surpassed consensus revenue estimates in three of the trailing four quarters, which is promising.
PCRX's shares surged by 1.9% intraday to close the last trading session at $30.02.
PCRX’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted optimally.
The stock has an A grade for Growth and Value and a B for Quality. In the Medical - Pharmaceuticals industry, PCRX is ranked #25 among 165 stocks.
To access additional ratings for PCRX’s Momentum, Stability, and Sentiment, click here.
Stock #2: Calliditas Therapeutics AB (publ) (CALT)
Based in Stockholm, Sweden, CALT specializes in developing and commercializing pharmaceutical products for orphan indications, focusing on renal and hepatic diseases. Its portfolio includes Nefecon for immunoglobulin A nephropathy and Setanaxib, a NOX inhibitor undergoing clinical trials for various conditions.
On March 11, 2024, CALT announced that the FDA had granted an additional seven-year orphan drug exclusivity period for Nefecon®, expiring in December 2030. This exclusivity reflects the drug's new indication to reduce kidney function loss in adults with primary immunoglobulin A nephropathy (IgAN), demonstrating significant benefits for patients at risk of disease progression.
On March 6, CALT announced that it had secured seven-year orphan drug exclusivity for TARPEYO® until December 2030, following FDA approval for its new indication in reducing kidney function loss in adults with primary immunoglobulin A nephropathy (IgAN).
In the fourth quarter, which ended December 31, 2023, CALT’s net sales grew 5.2% from the prior-year quarter to SEK451.56 million ($43.23 million). Its gross and net income increased 1.9% and 28.5% year-over-year to SEK429.26 million ($41.10 million) and SEK41.77 million ($4 million), respectively.
For the fiscal year ending December 2024, Street anticipates CALT's revenue to increase 70.6% year-over-year to $198.53 million, and the company is estimated to report an EPS of $0.11 for the same period. CALT’s revenue and EPS for the fiscal year 2025 are expected to grow 62.8% and 1,993.6% year-over-year to $323.12 million and $2.30, respectively.
CALT’s stock has gained 30% over the past six months to close the last trading session at $21.30.
CALT’s POWR Ratings reflect its robust prospects. The stock has an overall B rating, translating to a Buy in our proprietary rating system.
The stock has a B grade for Value and Sentiment. CALT is ranked #22 within the same industry.
Click here to view CALT’s ratings for Growth, Momentum, Stability, and Quality.
Stock #1: Astellas Pharma Inc. (ALPMY)
Headquartered in Tokyo, Japan, ALPMY is a leading global pharmaceutical company specializing in treatments for prostate cancer, acute myeloid leukemia, and other medical conditions.
On February 16, ALPMY and Kelonia Therapeutics joined forces to develop Immuno-Oncology therapies, leveraging Kelonia's iGPS® and Xyphos' ACCEL™ technology. Xyphos leads development, offering upfront payments, potential milestones nearing $800 million, and royalties for Kelonia.
During the nine months that ended December 31, 2023, ALPMY’s revenue grew 2.1% year-over-year to ¥1.19 trillion ($7.85 billion). Its gross profit increased 3.4% from a year-ago period to ¥969.81 billion ($6.40 billion). The company’s operating profit and EPS came in at ¥74.12 billion ($489.46 million) and ¥27.96, respectively.
Analysts expect ALPMY’s revenue for the fiscal year ending March 2024 to increase 129.2% year-over-year to $10.50 billion. Its EPS for the ongoing year is expected to be $0.24. Further, the company has surpassed consensus revenue estimates in three of the trailing four quarters.
In addition, for the fiscal year 2025, ALPMY’s revenue and EPS are estimated to grow 6.8% and 79.9% from the prior year to $11.21 billion and $0.43, respectively.
The stock has increased marginally intraday to close the last trading session at $10.95.
ALPMY’s sound fundamentals are reflected in its POWR Ratings. It has an overall rating of B, equating to a Buy in our proprietary rating system.
It has an A grade for Stability and a B for Value and Quality. ALPMY is ranked #19 in the same industry.
One can see the additional ratings for ALMPY for Growth, Momentum, and Sentiment here.
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ALPMY shares were trading at $11.07 per share on Thursday morning, up $0.12 (+1.13%). Year-to-date, ALPMY has declined -6.97%, versus a 10.46% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
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