Stock themes

Best pharmaceutical stocks

Pharmaceutical stocks are the large, established companies that develop, make and sell approved medicine. Unlike biotech they have finished products on the market and earnings that run year after year. That makes them some of the market's steadiest shares — but they live on patents, which expire, and on a pipeline that has to replace them. Below, our model ranks every US-listed pharmaceutical stock by score and momentum.

30
Stocks
50
Average momentum
1
Rated strong
Stock Momentum Score To target
Bristol-Myers Squibb CompanyStrong 80 236 +2%
Medtronic plcAverage 66 209 +12%
Novo Nordisk A/SAverage 37 207 +4%
Pfizer IncAverage 80 201 +2%
Johnson & JohnsonAverage 81 197 +2%
Amgen IncAverage 73 193 -1%
Amphastar PAverage 49 193 -2%
InMode LtdAverage 58 191 +8%
Sanofi ADRAverage 53 189 +24%
Eton Pharmaceuticals, IncAverage 98 179 +20%
Viatris IncAverage 70 176 +10%
Globus Medical, IncAverage 33 175 +36%
Eli Lilly and CompanyAverage 60 171 +17%
AbbVie IncAverage 72 170 +10%
Novartis AGAverage 44 163 +14%
Abbott LaboratoriesAverage 50 156 +13%
Teva Pharma Industries Ltd ADRAverage 83 154 +12%
Boston Scientific CorporationWeak 8 147 +38%
Gilead Sciences, IncWeak 78 145 +7%
Tactile Systems Technology, IncWeak 15 142 +78%
Bruker CorporationWeak 74 139 +0%
Merck & Co., IncWeak 91 134 +0%
Insulet CorporationWeak 7 127 +20%
Aurora Cannabis IncWeak 31 92 +61%
Butterfly Network, Inc.Weak 74 85 +42%
Tilray, IncWeak 3 78 +81%
Zomedica Corp.Weak 12 64 no target
Canopy Growth CorporationWeak 11 62 +27%
Nano-X Imaging LtdWeak 2 58 +460%
Hims & Hers Health, IncWeak 12 43 +11%

What counts as a pharmaceutical stock?

These are companies with approved medicine in sale and usually a broad range, so one disappointment does not sink the business. Johnson & Johnson, Pfizer, Bristol-Myers Squibb and Amgen are among the largest US-listed, and Novo Nordisk reaches the market as a depositary receipt. The theme also holds device and diagnostics companies such as Medtronic, which sell equipment rather than medicine and therefore follow different cycles.

What moves pharmaceutical stocks?

The patent cliff. When a large product loses protection, generics take the market and the revenue falls quickly. The date is known years ahead, so the question is always what replaces it.

The pipeline. What is in development decides whether the company grows past the cliff. That makes trial results matter here too, just less violently than in biotech.

Pricing and politics. Governments and insurers negotiate what medicine costs. A change in the rules can move the whole sector at once.

Acquisitions. Buying a biotech is the standard way to fill a gap, and a big deal changes both the balance sheet and the growth outlook.

Questions and answers

Are pharmaceutical stocks defensive?

Largely, yes: people buy medicine whether the economy is strong or weak, so revenue is steadier than in most sectors. But they carry a risk defensives usually do not — a patent expiry or a failed trial can change the outlook sharply.

What is a patent cliff?

The point where a medicine loses patent protection and cheaper copies are allowed. Revenue from that product typically falls fast. Because the date is known in advance, the market judges the company on what is ready to take over.

What is the difference between pharma and biotech?

Pharma companies are large and established, with approved products and running earnings. Biotech companies are typically smaller, still developing, and often not yet profitable — so they swing far more in both directions.

Why are device makers in the same theme?

Because they sell into the same health care market. But a device company earns from equipment sales and hospital budgets rather than from patents, so it follows a different cycle. Check the individual stock page for what each company actually lives on.

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