The pharmaceutical market continues to grow globally with aging populations and the development of new drugs. Global medical spending is expected to increase to nearly $1.80 trillion by 2026.
US accounts for approximately 45% of the global pharmaceutical market. Pharmaceutical sales in the United States are expected to remain robust in 2022 due to the continued deployment of the COVID-19 vaccine and growing demand for treatments. While vaccinations support the industry in the short term, market growth is expected to be driven by the aging population in the long term.
The global pharmaceutical market is expected to reach $1.59 trillion in 2022. It is expected to reach $2.14 trillion in 2026growing at a CAGR of 7.7%.
Given the favorable industry outlook, pharmaceutical stocks Assertio Holdings, Inc. (ASRT), Bayer Aktiengesellschaft (Bayry), Eagle Pharmaceuticals, Inc. (EGRX), and Merck & Co. Inc. (M.K.R.), which have strong growth attributes, could be solid investments at their current price levels.
Assertio Holdings, Inc. (ASRT)
ASRT is a specialty pharmaceutical company that offers drugs in different treatment areas including neurology, pain and inflammation. The company provides INDOCIN, an oral solution to treat moderate to severe rheumatoid arthritis, and CAMBIA, a nonsteroidal anti-inflammatory drug (NSAID).
In March, ASRT and BlinkRx, a patient access solution, announced their collaboration to support healthcare professionals and patients undergoing treatment with Otrexup, a single-dose auto-injector containing prescription medications.
ASRT’s total revenue increased 36.1% year over year to $36.54 million in the first quarter ended March 31. Its operating income rose 54% from the prior year’s value to $11.56 million, while its adjusted profit improved 70.3% year-on-year. other. -year at $17.53 million.
The company’s adjusted EPS rose 40.7% from its value a year ago at $0.38. ASRT’s EBIT has grown at a CAGR of 72.5% over the past three years. The consensus revenue estimate of $131.73 million for fiscal 2022 represents an 18.7% increase over the prior year.
The stock has gained 79.3% over the past year and 30.7% since the start of the year to close its last trading session at $2.85.
ASRT POWR Rankings reflect this promising prospect. The company has an overall rating of A, which translates to Strong Buy in our proprietary rating system. POWR ratings rate stocks on 118 different factors, each with its own weighting.
ASRT is rated A in Growth, Value, Sentiment and Quality. Within the Medical – Pharmaceutical industry, it is ranked #9 out of 172 stocks. To see additional POWR ratings for momentum and stability for ASRT, Click here.
Bayer Aktiengesellschaft (Bayry)
BAYRY operates as a worldwide life science company. It operates through the Pharmaceuticals, Consumer Health and Crop Science segments. The Company distributes its offerings through wholesalers, pharmacies and drugstore chains, supermarkets, online and other retailers, hospitals and directly to farmers. Its headquarters are in Leverkusen, Germany.
In June, the company announced that its subsidiary BlueRock Therapeutics LP had established a new site for cell therapy innovation at the company’s Berlin campus. The move is part of the company’s plan to advance cell therapies.
In April, BAYRY announced the continuation of an agreement under which Ginkgo Bioworks Holdings, Inc. (DNA) is expected to acquire BAYRY’s West Sacramento Biologics research and development (R&D) site and its in-house lead discovery and optimization platform. The company’s work with DNA is expected to accelerate the biological pipeline of BAYRY’s Crop Science division.
For the first quarter ended March 31, BAYRY’s net sales increased 18.7% year-on-year to €14.64 billion ($15.45 billion). Its net profit rose 57.5% from the previous year’s value to 3.29 billion euros ($3.47 billion). Gross profit improved by 24% over the prior year period to reach 9.46 billion euros ($9.99 billion).
BAYRY’s net profit has increased at a CAGR of 30.9% over the past three years, while its EPS has increased at a CAGR of 57.5% over the same period.
Street’s FY2022 EPS estimate of $1.95 indicates a 6.4% year-over-year improvement. The street revenue estimate for the same year of $51.06 billion reflects a 4.1% year-over-year increase. BAYRY has beaten consensus EPS estimates in each of the past four quarters, which is impressive.
BAYRY stock has gained 1.7% over the past year and 18.4% since the start of the year to close its last trading session at $15.69.
BAYRY’s strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of A, which is equivalent to Strong Buy in our proprietary rating system.
BAYRY has an A rating for growth and value and a B for stability. In the medical and pharmaceutical industry, it is ranked #10. Click here to see additional POWR ratings for BAYRY (Quality, Sentiment and Momentum).
Eagle Pharmaceuticals, Inc. (EGRX)
Eagle Pharmaceuticals is a pharmaceutical company focused on the development and commercialization of products to treat central nervous system diseases, critical metabolic care and oncology in the United States.
On June 9, EGRX announced the completion of its acquisition of all of the issued share capital of Acacia Pharma Group. “The closing of this transaction is a great achievement for Eagle, both strategically and financially. The addition of the two products expands our presence in the acute care space, and we believe our highly skilled hospital sales force will be very successful in bringing these assets to market,” said Scott Tarriff, President and CEO. of EGRX.
During the first quarter ended March 31, EGRX’s revenue increased 180.9% year over year to $115.87 million. Its operating income rose 1,685.7% year-over-year to $59.83 million, while its adjusted non-GAAP net income was $52.15 million. dollars, up 1,546.7% year-over-year. The company’s non-GAAP adjusted EPS improved 1,583.3% from the prior year period to $4.04.
EGRX’s revenue grew at a CAGR of 4.4% over the past three years, while its EPS grew at a CAGR of 2.60% over the same period.
Analysts expect EGRX’s revenue for the quarter ending June 2022 to be $116.90 million, indicating 142.9% year-over-year growth. The company’s EPS is expected to increase 261.7% from the prior year period to $3.36 for the same quarter.
EGRX has gained slightly over the past five days to close its last trading session at $42.89.
It’s no surprise that EGRX has an overall rating of B, which translates to Buy in our POWR rating system. The stock has an A rating for growth and value and a B for quality. It is ranked #21 in the medical and pharmaceutical industry.
Beyond what we’ve stated above, we’ve also assigned EGRX ratings for Momentum, Stability, and Sentiment. Get All EGRX Ratings here.
Merck & Co., Inc. (M.K.R.)
MRK is a global healthcare company operating through its two major pharmaceutical segments, which offers pharmaceutical products for human health; and Animal Health, which develops and markets veterinary pharmaceuticals.
In June, MRK announced that the European Commission had approved KEYTRUDA, MRK’s anti-PD-1 therapy, as monotherapy for the adjuvant treatment of adults and adolescents aged 12 years and older with stage 1 melanoma. IIB or IIC and having undergone a complete resection. This approval allows KEYTRUDA to be marketed in all 27 EU Member States.
In the same month, the company announced that the U.S. Food and Drug Administration (FDA) had approved an expanded indication for VAXNEUVANCE (15-valent pneumococcal conjugate vaccine) to include children six weeks to 17 years of age for the active immunization for preventive purposes. of invasive disease.
Additionally, the US Centers for Disease Control and Prevention (CDC) Advisory Committee on Immunization Practices (ACIP) voted unanimously to include VAXNEUVANCE as a recommended option for immunization of infants and children.
MRK’s net sales increased 49.6% year-on-year to $15.90 billion in the first quarter of 2022. Its non-GAAP net income improved 84.2% from the the previous year to reach $5.43 billion. The company’s non-GAAP EPS rose 84.5% from its value a year ago at $2.14.
MRK’s net income grew at a CAGR of 19.1% over the past three years, while its EPS grew at a CAGR of 20.1% over the same period.
The consensus revenue estimate of $13.73 billion for the second fiscal quarter (ending June 2022) reflects a 20.5% increase over the same period last year. The consensus EPS estimate of $1.67 indicates a 27.7% year-over-year improvement for the same quarter.
The company has an impressive surprise earnings history, as it beat consensus EPS estimates in three of the past four quarters.
The stock has gained 19.6% over the past year and 19.9% since the start of the year to close its last trading session at $91.89.
MRK has an overall A rating, which is equivalent to Strong Buy in our proprietary rating system. The stock is rated A in growth and B in value, stability, sentiment and quality. Within the same industry, it is ranked #2.
To see more component qualities from MRK, Click here.
ASRT shares were trading at $2.85 per share on Wednesday afternoon, down $0.00 (0.00%). Year-to-date, ASRT has gained 30.73%, compared to a -19.24% rise in the benchmark S&P 500 over the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. After…