Pharmaceutical companies can be a great investment. Especially for investors in search of long-term growth candidates for their portfolio. A successful new drug or treatment is covered by patents for 20 years in the U.S. market. That means years of ongoing revenue — and long-term growth for many pharma stocks.
But the downside to pharma stocks is risk. A company can spend considerable time and money in developing a promising drug only to have it fail in clinical trials and never make it to market.
To help you out, each of these pharmaceutical companies earns at least a “B” rating in Portfolio Grader. This provides some assurance that they are on sound footing.
- Annovis Bio Inc (NYSEAMERICAN:ANVS)
- Brooklyn ImmunoTherapeutics Inc (NYSEAMERICAN:BTX)
- Cassava Sciences Inc (NASDAQ:SAVA)
- Citius Pharmaceuticals Inc (NASDAQ:CTXR)
- Jazz Pharmaceuticals PLC (NASDAQ:JAZZ)
- Mind Medicine (MindMed) Inc (NASDAQ:MNMD)
- SpringWorks Therapeutics Inc (NASDAQ:SWTX)
The global pharmaceutical market is huge. It’s on track to be worth $1.25 trillion this year. By 2025, it’s projected to hit $1.70 trillion. Those are very big numbers. Adding pharma stocks to your portfolio helps you to capture some of that growth opportunity.
Pharma Stocks to Buy: Annovis Bio (ANVS)
Pennsylvania-based Annovis Bio is focused on treatments for neurodegenerative diseases including Alzheimer’s and Parkinson’s. With an aging population, the number of people suffering from these diseases is on the rise. According to the Alzheimer’s Organization, there are currently 6 million Americans afflicted with Alzheimer’s. That number is projected to more than double by 2050, hitting 12.7 million. Caring for Alzheimer’s patients is expected to cost $355 billion this year. That number could rise as high as $1.1 trillion by 2050.
Effective treatments for neurodegenerative diseases are lacking. That means a huge potential market for Annovis. ANVS stock has been on the rise through 2021 as the company publishes the results of encouraging clinical trials. On May 21, Annovis announced significant cognitive improvements among both Alzheimer’s and Parkinson’s patients after using the company’s ANVS401 drug candidate for less than a month. That news sent ANVS stock rocketing 127% in a single day.
Currently trading just under $103, ANVS has delivered growth of 1,260% so far in 2021. However, given the size of its addressable market should drugs like ANVS401 make it to production, that may be just the start of the growth story for this pharma stock.
At the time of publication, ANVS stock earned an “A” total grade in Portfolio Grader.
Brooklyn ImmunoTherapeutics (BTX)
This Brooklyn-based (thus the name) company has been working on cancer treatments, using the immune system. However, BTX stock saw a massive surge in late April and early May when the company announced it had obtained a license for mRNA gene-editing and cell-therapies technology. This allows Brooklyn to expand into gene editing and cell therapy cancer treatments as well. That news saw BTX stock surge 1,138% in a matter of days.
Shares gave back much of that gain as investors realized that the mRNA license won’t translate into an immediate product release. In fact, Brooklyn says it does not expect to have an mRNA treatment even at the investigational stage until 2024. However, the company’s IRX-2 treatment for head and neck cancer performed well in Phase 2A clinical trials.
With BTX stock trading below $15 — a fraction of its $78.50 close in early May — now might be the time to consider an investment.
BTX stock currently earns a “B” grade in Portfolio Grader.
Cassava Sciences (SAVA)
Like Annovis Bio, Texas-based Cassava Sciences is a biopharmaceutical company focused on neuroscience and seeking a treatment for Alzheimer’s Disease. Cassava has an added wrinkle in its work on a blood test to detect Alzheimer’s. That could be a game-changer.
The current methods for detecting Alzheimer’s rely on tracking mental decline. The disease is well-established by the time it can be confirmed. A blood test would provide a definitive result, and it could potentially alert doctors before symptoms of the disease set in. That would provide valuable time to take measures that could slow progression, before irreversible brain damage occurs. It’s not a cure, but arguably just as important.
Cassava’s Simufilam Alzheimer’s treatment is entering Phase 3 clinical trials. The company’s SavaDX blood-based test for Alzheimer’s is in clinical stages and receiving funding from the National Institutes of Health (NIH).
SAVA stock has posted gains of 1,395% in 2021. If either of the company’s Alzheimer’s products is approved, that would transform this into one of the coveted pharma stocks that continues to deliver impressive growth over the long term.
The current Portfolio Grader rating for SAVA stock is “B.”
Citius Pharmaceuticals (CTXR)
Citius Pharmaceuticals works on the development and commercialization of critical care products. While it has multiple products in the pipeline, much of the attention in 2021 has been focused on Mino-Lok. This antibiotic was licensed from The University of Texas MD Anderson Cancer Center. Mino-Lok is used to treat patients suffering from catheter-related bloodstream infections (CRBSIs). It would have applications ranging from dialysis to cancer patients.
Mino-Lok is currently undergoing Phase 3 clinical trials. If approved, it would be the only FDA-approved treatment for CRBSIs. In addition, the company has other products in clinical stage trials. CITI-002 is designed to treat the inflammation and discomfort of hemorrhoids, while CITI-101 (Mino-Wrap) reduces infections in breast reconstruction surgeries.
CTXR stock has taken investors on a bit of a roller coaster ride in 2021, but remains up over 100% so far this year. A lawsuit just filed over Mino-Lok trial results and FCC regulations shows that the volatility may not be over yet. However, Citius Pharmaceuticals shares are positioned for long-term growth should Mino-Lok be approved.
CTXR stock currently earns a “B” rating in Portfolio Grader.
Jazz Pharmaceuticals (JAZZ)
Ireland’s Jazz Pharmaceuticals is part of a group of large-cap pharma stocks with established products providing a steady revenue stream. Jazz operates oncology and neuroscience divisions, but the bulk of its revenue comes from a drug called Xyrem, used to treat narcolepsy. One challenge facing Jazz is that generic versions of Xyrem will be arriving, starting in 2023.
However, the company has other products in production and over a dozen in the pipeline. In addition, in January, Jazz paid $7.2 billion to acquire medical cannabinoid company GW Pharmaceuticals. That bet has real potential to pay off. GW Pharma reported that revenue for its Epidiolex (a cannabis-based treatment for epilepsy) hit $510 million in 2020. That’s a 72% year-over-year increase. It will also be a meaningful boost to Jazz Pharmaceuticals, which reported revenue of $2.36 billion in 2020.
JAZZ stock has been a slow performer over the past five years, but since last April it has been in growth mode. Investors have seen a 90% gain since that time. The acquisition of GW Pharmaceuticals is shaping up to be a catalyst that will keep JAZZ stock on the long-term growth path. It’s a consensus “Buy” among the investment analysts polled by the Wall Street Journal.
The Portfolio Grader rating for JAZZ stock at time of publication was “B.”
New-York-based MindMed is an interesting pharma stock. Why would a company specializing in the use of psychedelic drugs like LSD, MDMA and psilocybin mushrooms make a big impression when there are so many pharma companies focusing on revolutionary technology like mNRA?
Mental wellness — anxiety and depression — is big business. As I wrote a week ago, the pandemic has also caused a surge in these issues. With companies beginning to bring staff back to the office, that anxiety is only going to increase. MindMed’s psychedelic-based medicines and therapies for mental wellness make it unique among pharma stocks. They also position MNMD stock well for long-term growth should they pass clinical trials and come to market. In the meantime, the company has plenty of cash on hand.
With shares off 32% from April highs, now is a good time to think about MNMD stock for your portfolio.
MNMD stock currently rates an “A” total grade in Portfolio Grader.
SpringWorks Therapeutics (SWTX)
The final entry on this list of pharma stocks to buy for July is Connecticut-based SpringWorks Therapeutics. SpringWorks’ focus is targeted oncology — treatments that specifically target a tumor in an effort to stop growth and ideally destroy it.
SpringWorks has 13 cancer treatments in its pipeline, in varying stages of clinical trials. I don’t need to tell you how valuable any cancer treatments can be. Since going public in September 2019, SWTX stock has been on a growth trajectory, delivering a 268% return since that time.
The investment analysts tracked by CNN Business have SWTX stock rated as a consensus “Buy.” Even the least optimistic of the group has a $97 price target, which represents nearly 17% upside. If you’re looking for pharma stocks with long-term growth potential, SWTX is well worth considering.
At time of publication, SWTX stock earned a “B” rating in Portfolio Grader.
— Louis Navellier and the InvestorPlace Research StaffAmerica's #1 Stock Picker: BUY "AMZN of Houses" [sponsor]
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Source: Investor Place