The pharmaceutical landscape is undergoing a transformative shift with the advent of technologies like AI, big data, and IoT, heralding the era of Pharma 4.0. Moreover, given the rising pharma demand, quality pharma stocks Procaps Group S.A. (PROC), Sanofi (SNY), Viatris Inc. (VTRS), Ipsen S.A. (IPSEY), and Teva Pharmaceutical Industries Limited (TEVA) could be solid buys.

The pharma industry is currently witnessing unprecedented growth. Breakthrough therapies launched in the last decade are reshaping patient care. Moreover, spending on medicine growth is driven by both volume and higher-cost therapies, reflecting broader access to medicines with greater clinical value.

Global spending on medicine grew 35% over the past five years, and it is projected to surge around 38% by 2028, reflecting the growing demand for medicinal products.

Additionally, the rising incidence of chronic and rare diseases requiring tailored treatments, along with a growing emphasis on genomic research, is fueling the expansion of the personalized medicine sector. Additionally, the increasing elderly population is anticipated to bolster the demand for precision therapies.

Projections suggest that by 2028, the global precision medicine market will reach $118.08 billion, with a CAGR of 9.9%.

On top of it, as the pharmaceutical industry evolves, new technologies like AI, big data, and IoT are transforming drug discovery and development. This shift, known as Pharma 4.0, offers opportunities for faster, more accurate analysis and better patient outcomes.

Besides, the AI market in pharmaceuticals is forecasted to exceed $18.06 billion, growing at a CAGR of 42.7% from 2024 to 2029.

With these favorable trends in mind, let’s delve into the fundamentals of the five Medical – Pharmaceuticals stock picks, beginning with the fifth choice.

Stock #5: Procaps Group S.A. (PROC)

Headquartered in Luxembourg, PROC develops, produces, and markets pharmaceutical solutions globally. It formulates, manufactures, and markets branded prescription drugs in several therapeutic areas like feminine care products, pain relief, skin care, digestive health, cardiology, central nervous system, and respiratory.

During the third quarter that ended September 30, 2023, PROC’s net revenues increased 7.2% year-over-year to $118.41 million. The company’s gross profit grew marginally from the year-ago value to $68.40 million. Its adjusted EBITDA for the quarter was $22 million.

Street expects PROC’s revenue for the fiscal year ended December 2023 to increase 3.5% year-over-year to $424.20 million.

Shares of PROC have gained 20.2% over the past three months to close the last trading session at $3.25.

PROC’s POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

The stock has a B grade for Sentiment, Value, and Quality. PROC is ranked #28 in the 161-stock Medical – Pharmaceuticals industry.

Click here to access additional PROC ratings for Growth, Stability, and Momentum.

Stock #4: Sanofi (SNY)

Headquartered in Paris, France, SNY engages in the research, development, manufacture, and marketing of therapeutic solutions in the United States, Europe, and internationally. It operates through Pharmaceuticals; Vaccines; and Consumer Healthcare segments.

In the fiscal year that ended December 31, 2023, SNY’s net sales amounted to €43.07 billion ($46.45 billion), up marginally year-over-year. Its gross profit grew 1.6% from the year-ago quarter to €32.21 billion ($34.74 billion). Its operating income stood at €7.88 billion ($8.50 billion).

Besides, net income attributable to SNY and earnings per share came at €5.40 billion ($5.82 billion) and €4.31 per share, respectively.

SNY’s revenue and EPS are expected to come at $53.71 billion and $4.85, respectively, for the fiscal year ending December 2025, up 9.3% and 12.8% year-over-year.

Over the past three months, the stock has gained 2.3% to close the last trading session at $46.50.

SNY’s bright fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system.

It has a B grade for Value and Stability. It is ranked #18 within the same industry.

To see SNY’s additional Growth, Momentum, Sentiment, and Quality ratings, click here.

Stock #3: Viatris Inc. (VTRS)

VTRS operates as a healthcare company that operates in four segments: Developed Markets; Greater China; JANZ; and Emerging Markets. It offers prescription brand drugs, generic drugs, complex generic drugs, biosimilars, and active pharmaceutical ingredients (APIs).

VTRS’ total revenue in the fiscal third quarter ended September 30, 2023, came in at $3.94 billion. Its Generics product sales rose 2% year-over-year to $1.23 billion. The company’s adjusted gross profit stood at $2.33 billion. Also, its adjusted net earnings amounted to $952.80 million.

For the quarter ending March 31, 2024, VTRS’ revenue is expected to increase marginally year-over-year to $3.76 billion. It surpassed the consensus EPS estimates in three of the trailing four quarters.

Over the past three months, the stock has gained 28.9% to close the last trading session at $11.68.

VTRS’ POWR Ratings reflect its rosy prospects. The stock has an overall rating of A, translating to a Strong Buy in our proprietary rating system.

It has an A grade for Value and a B for Growth. It is ranked #16 in the same industry.

Click here to see the other ratings of VTRS for Momentum, Stability, Sentiment, and Quality.

Stock #2: Ipsen S.A. (IPSEY)

Based in Boulogne-Billancourt, France, IPSEY operates as a global biopharmaceutical company. It provides drugs in the areas of oncology, neuroscience, and rare diseases. The company offers Somatuline, Dysport, Decapeptyl, Cabometyx, Onivyde, and Tazverik. It also provides NutropinAq for growth failure in children.

In the fiscal year 2023, IPSEY’s total sales rose 3.4% year-over-year to €3.13 billion ($3.38 billion). Its core operating income amounted to €1 billion ($1.08 billion), and core consolidated net profit stood at €765.50 million ($825.58 million). Moreover, it generated a core EPS of €9.15 and free cash flow came in at €710.90 million ($766.69 million).

IPSEY’s revenue is expected to increase 8.3% year-over-year to $3.65 billion for the fiscal year (ended December 2024).

IPSEY’s stock has gained 1marginally intraday to close the last trading session at $28.66.

IPSEY’s robust fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.

IPSEY has an A grade for Value and a B for Growth, Stability, and Quality. Within the same industry, IPSEY is ranked #12.

In addition to the POWR Ratings stated above, one can access IPSEY’s ratings for Sentiment and Momentum here.

Stock #1: Teva Pharmaceutical Industries Limited (TEVA)

Based in Tel Aviv, Israel, TEVA develops, manufactures, markets, and distributes generic medicines, specialty medicines, and biopharmaceutical products internationally.

TEVA’s net revenues increased 14.8% year-over-year to $4.46 billion in the fourth quarter that ended December 31, 2024. Its non-GAAP gross profit grew 23.1% from the year-ago quarter to $2.59 billion.

Also, non-GAAP net income attributable to TEVA rose 43.5% year-over-year to $1.14 billion, and non-GAAP EPS attributable to TEVA was $1, an increase of 40.8% from the prior year’s quarter.

Analysts expect TEVA’s EPS for the first quarter (ending March 2024) to increase 29.1% year-over-year to $0.52. Its revenue is likely to be $3.77 billion, up 3% year-over-year. Moreover, the company exceeded consensus revenue estimates in each of the trailing four quarters.

TEVA’s stock has surged 36.9% over the past three months and 22.3% over the past year to close its last trading session at $12.01.

TEVA’s solid fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.

The stock has an A grade for Value and Growth. TEVA is ranked #11 in the same industry.

To see additional POWR Ratings of TEVA for Sentiment, Quality, Stability, and Momentum, click here.

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SNY shares were trading at $46.47 per share on Monday afternoon, down $0.03 (-0.06%). Year-to-date, SNY has declined -6.56%, versus a 5.87% rise in the benchmark S&P 500 index during the same period.

About the Author: Kritika Sarmah

Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities. More...

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