The pharmaceutical sector never ceases to surprise investors. Being one of the most stable sectors in the market, the pharma sector is full of large-cap and small-cap stocks with loads and loads of growth potential in them. While the small-cap stocks keep springing up every other quarter with some blockbuster performances, the big names continue to rule the market with their consistent performances, high quality drugs, great business strategies and huge cash flows. For the month of March, the following huge pharma stocks are considered to be the best for investment purposes, as their prices are currently trading at huge discounts.
A future full of options
One of the biggest pharmaceutical companies, Pfizer (PFE, Financial), is currently trading at low prices because of an overall reduction in its earnings during the first two months of 2015. One strong point for the company is its ability to generate free cash flow worth billions of dollars every year. Currently there are lots of options open before the management of the company. Whichever route it takes, its shares are poised for an increase in the future. Some investors believe that it would do a world of good for Pfizer, if it divides its businesses into two separate parts – the risky business (with lots of innovative products of high growth potential) and the more stable business (medium growth potential with branded products). Some other experts are of the opinion that Pfizer would grow phenomenally if it acquires a promising biotechnology company, as more drugs would mean more business. Investment experts, however, are sure that Pfizer could benefit in all the three ways – either a breakup, acquisition or both of these, thereby bringing huge contentment for investors. Stock movement of Pfizer for the last few months is seen below:
Breakthrough performance of cancer drug
The next must-buy pharma stock that we are going to discuss is Bristol Myers Squibb (BMY, Financial) (BMY). The reason is very simple – the Opdivo drug. Ever since the Food and Drug Administration approved this drug, shares of Bristol Myers have reported huge increases. Opdivo is the drug that is used to treat NSCLC (non-small chemotherapy lung cancer) patients. This is a breakthrough discovery indeed, because lung cancer contributes to around 25% of all cancers. Every year, millions of patients are diagnosed with lung cancer all over the world and Opdivo would now end the troubles of these patients. During the test study, close to 41% of the patients who were administered Opdivo drug lived at least one year extra than the lifetime average of lung cancer patients. The FDA saw huge promise in this drug, which is why it approved the same in record time. This one drug could lift up Bristol Myers to a great extent this year. Experts believe that by 2017, this drug would touch the record mark of $3 billion in sales. If that happens, Bristol-Myers could well become the undisputed king in the lung cancer treatment market. It is wise to buy these shares now as the prices could shoot up anytime from now due to the success of Opdivo drug. History of share prices for the last few months is seen below:
Conclusion
It takes just one drug to make or break the image of a pharmaceutical company. Since it is a life-saving industry, companies with bad products are never forgiven. Hence all these companies conduct various test studies on their drugs and keep fine-tuning them, before sending out the same to the FDA for approval. Once approval is received, it automatically lifts the share prices and the image of the company in the minds of investors. That way, the above stocks mentioned above have some breakthrough drugs in the market which have defined their success till date. For the future, they have lots of promising growth strategies lined up, to add value to their investors. Hence in the light of all these factors, experts believe that if investors purchase these stocks right now, they can reap rich profits in the long term.
