In this piece, we will take a look at the 13 best low price pharma stocks to invest in. If you want to skip our overview of the pharma industry and want to skip to the five top low price stocks in this list, then you can skip ahead to 5 Best Low Price Pharma Stocks To Invest In.
The pharmaceutical industry is one of the more interesting sectors that you're likely to come across. This is because unlike other stock sectors, such as consumer defensive and consumer technology, which are often dependent on economic performance for their share price returns, pharma stocks can often provide investors with the best of both worlds. Pharma companies can either be those that primarily sell over the counter or other everyday medicines or those that operate in high technology areas such as biotechnology.
This means that in a high interest rate environment, such as the one that we're going through right now, pharma stocks belonging to the latter segment aren't the strongest performers. Evaluating these stocks, whose primary line of business often involves requiring advanced knowledge of biology and chemistry, is quite difficult, and financial firms and analysts spend copious amounts of money on the right analysts to help them pick out the right pharma stocks to invest in.
The latest bit of news on the stock market is also quite relevant to pharma stocks. This news is for the inflation data of March 2024, a data set that exceeded expectations and led major stock indexes such as the S&P 500 and the NASDAQ to pare back some of their gains that had come mostly due to the investor hype surrounding artificial intelligence.
To understand how the shift in investor sentiment on Wall Street after the latest inflation data release has affected pharma stocks, consider the performance of the S&P Pharmaceuticals Select Industry Index. This stock index consists of stocks from the Pharmaceutical sector of the S&P's classification standard called the Global Industry Classification Standard (GICS). Over the past twelve months, the pharma stock index is down 4.52%, and while these stocks are up by 3.21% over the past six months, the index has lost 8% in April so far.
However, even though pharma stocks as a whole are falling, this doesn't mean that the industry hasn't made the news in April. some of the most important pharmaceutical news in April 2024 comes from some of the biggest pharma companies in the world. These companies are Johnson & Johnson (NYSE:JNJ), AstraZeneca PLC (NASDAQ:AZN), and Pfizer Inc. (NYSE:PFE). Starting from Pfizer, the firm announced phase three data for its respiratory disease vaccine called ABRYSVO. The latest bit of ABRYSVO's tests intended to check whether the medicine could generate the required immune system and other responses from patients that had pre existing complications such as diabetes. For Pfizer, the results were good news as the medicine met all testing objectives.
The news surrounding AstraZeneca was more impressive for its technological prowess. The firm scored a big when the U.S. Food and Drug Administration (FDA) granted its cancer and solid tumor medicine accelerated approval to fight tumors that are treatment resistant. These tumors can often not be removed by surgery, and the approval was the fifth such indication for the drug. This wasn't the only win for AstraZeneca in the pharma industry though. Its second win came in the form of another drug called Fasenra which secured the FDA's approval for use in children to help them manage their asthma.
Finally, before we head to our list of the best low price pharma stocks, U.S. pharma giant JNJ also shook things up by quite a bit in April 2024. JNJ, who started out the year on a rather controversial note after it agreed to pay a whopping $700 million in settlement for its talc powder, was eager to remind everyone that its coffers ran deep. This is because the firm is now acquiring the specialized medical devices company Shockwave Medical, Inc. (NASDAQ:SWAV) for a cool $13.1 billion price tag. JNJ aims to buy Shockwave's shares for $335 a piece, and through this deal, it aims to gain a foothold in the global heart surgery market.
There was a -4% decline from Shockwave Medical, which develops intravascular devices for calcified cardiovascular diseases. The company’s revenues and earnings exceeded expectations, though management did not increase its guidance for the first time since the beginning of the pandemic. That hesitancy stemmed from private insurers increasing the need for preauthorization for treating peripheral arterial disease and a Chinese anti-corruption campaign hampered restocking for Shockwave’s joint venture in China. However, Shockwave’s outlook for 2024 remained strong and we added to our position on the near-term weakness.
With these details in mind, let's take a look at some low price pharma stocks to buy. A couple of notable picks are Viatris Inc. (NASDAQ:VTRS), Teva Pharmaceutical Industries Limited (NYSE:TEVA), and Elanco Animal Health Incorporated (NYSE:ELAN).
11 Best Low Price Pharma Stocks To Invest In
A closeup of pills in a pharmacy, representing the high quality medications of the company.
Our Methodology
To make our list of the best low price pharma stocks, we ranked the forty most valuable pharma stocks in terms of market capitalization and with a share price lower than $20 by the number of hedge funds that had bought their shares in Q4 2023.
For these best low price pharma stocks, we used hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
Evolus, Inc. (NASDAQ:EOLS) is an American pharmaceutical company headquartered in Newport Beach, California. It primarily provides aesthetic products such as an alternative to Botox. The shares have been doing quite well as of late, with the stock up by 47% over the past twelve months.
During Q4 2023, 24 out of the 933 hedge funds profiled by Insider Monkey had bought and owned Evolus, Inc. (NASDAQ:EOLS)'s shares. Timothy P. Lynch's Stonepine Capital was the biggest investor due to its $56.1 million stake.
Along with Teva Pharmaceutical Industries Limited (NYSE:TEVA), Viatris Inc. (NASDAQ:VTRS), and Elanco Animal Health Incorporated (NYSE:ELAN), Evolus, Inc. (NASDAQ:EOLS) is a low price pharma stock that hedge funds are buying.
Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH) is a specialty drug manufacturer that primarily deals with cancer treatments. Its shares are rated Buy on average, and the average analyst share price target is $24.20.
For their fourth quarter of 2023 shareholdings, 24 out of the 933 hedge funds part of Insider Monkey's database had held a stake in the firm. Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH)'s largest hedge fund shareholder among these is James E. Flynn's Deerfield Management as it owns $93.3 million worth of shares.
Avadel Pharmaceuticals plc (NASDAQ:AVDL) is an Ireland based pharmaceutical firm that provides treatments that help people with sleeping disorders. March 2024 was an interesting month for the firm as while it lost a patent suit to a rival firm, the rate of damages awarded to the winner was significantly lower than what had initially been feared.
During last year's fourth quarter, 26 out of the 933 hedge funds covered by Insider Monkey's research were Avadel Pharmaceuticals plc (NASDAQ:AVDL)'s shareholders. Brian Ashford-Russell and Tim Woolley's Polar Capital owned the biggest stake which was worth $95.3 million.
Esperion Therapeutics, Inc. (NASDAQ:ESPR) sells medicines that help people with regulating their cholesterol. The firm scored a win in March 2024 when the FDA approved its existing medicines to be used for additional use cases as well. According to Esperion Therapeutics, Inc. (NASDAQ:ESPR), this grows its product market by 70 million patients.
As of December 2023 end, 28 out of the 933 hedge funds profiled by Insider Monkey had invested in the firm. Esperion Therapeutics, Inc. (NASDAQ:ESPR)'s largest hedge fund stakeholder is Sina Toussi's Two Seas Capital through its $22.9 million investment.
Dynavax Technologies Corporation (NASDAQ:DVAX) is a specialized pharma company whose products help protect against Hepatitis B and also make vaccines for the disease. Its shares are rated Buy on average, and the average analyst share price target is $25.75.
For their fourth quarter of 2023 shareholdings, 28 out of the 933 hedge funds profiled by Insider Monkey were Dynavax Technologies Corporation (NASDAQ:DVAX)'s shareholders. Its biggest investor in our database is David Kroin's Deep Track Capital as it holds $99.1 million worth of shares.
Organon & Co. (NYSE:OGN) is a women's health company whose products help with fertility, pregnancy management, and other use cases. The firm sought to boost its social credentials in April 2024 after announcing a new program to help women manage their careers and the unique health risks that they might face.
30 out of the 933 hedge funds part of Insider Monkey's Q4 2023 database had bought a stake in the firm. Organon & Co. (NYSE:OGN)'s largest hedge fund shareholder is Ken Griffin's Citadel Investment Group through its $60.7 million stake.
Viatris Inc. (NASDAQ:VTRS), Organon & Co. (NYSE:OGN), Teva Pharmaceutical Industries Limited (NYSE:TEVA), and Elanco Animal Health Incorporated (NYSE:ELAN) are some top hedge fund low price pharma stocks.
