We recently compiled a list of the 12 Best Small Cap Pharma Stocks to Buy Now.In this article, we are going to take a look at where Indivior PLC (NASDAQ:INDV) stands against the other small cap pharma stocks.
Impact of US Tariffs and Obesity Drug Performance on the Pharmaceutical Industry
Emily Field, Head of European Pharma Research at Barclays, spoke on CNBC on February 20 about the performance of obesity medications, the effects of US tariffs, and the dynamics of the pharmaceutical industry. According to her, the industry might not perform poorly at least in the first half of this year. The effectiveness of obesity medications is still up for debate, though, as leading companies in the field have shown inconsistent results.
Speaking about the tariffs, she stated that since some businesses assemble their products in the US after producing them overseas, their implementation raises several unanswered questions for the pharmaceutical industry. These businesses therefore have relatively low manufacturing costs, which is an important factor to take into account when assessing the effects of tariffs. She thought that these businesses could easily absorb the higher expense of the tariffs. The topic hasn't come up much on earnings calls this quarter, and the market is nearing the end of the reporting season.
Eli Lilly's Chief Scientific Officer spoke with CNBC's Health and Pharma correspondent Angelica Peebles about the weight reduction industry. The domain presents opportunities for easier-to-use treatments, including tablets, and medications that help individuals lose weight, she noted based on the conversation. How much weight reduction users need to observe on top of what they already have is another topic of discussion about the subject. According to Dan Skovronsky, Chief Scientific Officer of Eli Lilly, the majority of the audience seems to benefit from medications that provide about 20% weight loss. According to him, the market for stronger medications that offer at least 25% is smaller.
He also believed that the potential benefits of these weight reduction medications for a wide range of illnesses were the most fascinating thing he had witnessed in his work as a scientist and doctor. The patterns they have been observing in the answers from patients serve as their current source of knowledge.
Our Methodology
For our methodology, we selected stocks with a market capitalization between $250 million and $2 billion and ranked them based on the highest hedge fund sentiment according to Insider Monkey's database, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A scientist in a lab coat working with a microscope, researching a biopharmaceutical solution.
Indivior PLC (NASDAQ:INDV) specializes in treatments for opioid addiction and serious mental illnesses and tops the list of the best pharmaceutical stocks. Its main products include buprenorphine-based medications like Sublocade, Suboxone, and Subutex for opioid use disorder, as well as Perseris for schizophrenia. With around 85% of its revenue coming from the U.S., the company focuses on addressing the opioid crisis and developing innovative treatments for substance use disorders and mental health conditions, positioning itself as a key player in this critical and expanding market.
Indivior PLC (NASDAQ:INDV)'s Q4 2024 financial results show steady growth, with total net revenue reaching $298 million, a 2% increase from the previous year. The company's key product, Sublocade, saw a 10% increase in net revenue, reaching $194 million. Full-year 2024 performance was even stronger, with total net revenue rising by 9% to $1.188 billion, and Sublocade's revenue surging by 20% to $756 million. The company also maintained a healthy adjusted gross margin of 83% and a stable adjusted operating profit of $66 million in Q4.
Looking ahead, Indivior PLC (NASDAQ:INDV)'s growth strategy revolves around Sublocade, which is expected to reach a peak net revenue of over $1.5 billion. The company is focusing on cost reductions and reinvesting savings into expanding Sublocade's market presence and advancing its pipeline in opioid use disorder treatments. For 2025, the corporation forecasts total net revenue between $955 million and $1.025 billion, with Sublocade revenue projected at $725 million to $765 million.
Overall INDV ranks 1st on our list of the best small cap pharma stocks to buy now. While we acknowledge the potential of INDV as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than INDV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
