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Few big pharma stocks excited investors in the first half of 2018. Sure, there were a few stocks that performed pretty well. Overall, though, the year has been at best mediocre for the stocks of major drugmakers. Could the rest of 2018 be a better picture? Maybe so.
Three big pharma stocks, in particular, could be set to move higher. Here's why I think AbbVie (NYSE: ABBV), Celgene (NASDAQ: CELG), and Gilead Sciences (NASDAQ: GILD) are the three best big pharma stocks to buy for the second half of 2018.
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1. AbbVie
AbbVie stock was on a roll this year until the company's announcement in March of disappointing phase 2 study results for Rova-T in treating small-cell lung cancer. The drugmaker's shares tanked on the news and still haven't recovered. But better things could be in store for AbbVie.
An FDA decision on approval for elagolix in treating endometriosis-associated pain is expected by early August. AbbVie thinks elagolix could become its next blockbuster drug. The company is also evaluating elagolix in a phase 3 clinical study targeting the treatment of uterine fibroids.
AbbVie has a major regulatory filing on the way in the next few months as well. The big pharma company reported overwhelmingly positive results from multiple late-stage clinical studies of upadacitinib in treating rheumatoid arthritis with the most recent results announced in June. Upadacitinib appears likely to be AbbVie's second-most successful immunology drug, trailing only Humira, which ranks as the top-selling drug in the world.
More good news could be on the way in the future. Market research firm EvaluatePharma views AbbVie's pipeline as No. 2 overall in the biopharmaceutical industry.
2. Celgene
It's been a rough year so far for Celgene, with shares down around 20%. Celgene committed the pharma equivalent of an unforced error earlier in 2018, with its filing for ozanimod in treating multiple sclerosis (MS) rejected by the FDA right out of the gate. There are plenty of things to like about the company and its stock, though.
Celgene has had some good news lately. A few days ago, the company and its partner, Acceleron Pharma, announced great results from a late-stage study of luspatercept in treating rare blood disorder beta-thalassemia. Less than two weeks earlier, Celgene and Acceleron reported positive phase 3 results for the drug in treating myelodysplastic syndromes (MDS). Luspatercept could generate peak annual sales topping $2 billion if approved for both indications. The partners plan to submit for FDA approval of luspatercept in the first half of 2019.