In this article, we discuss the 10 best cancer stocks. To skip the detailed analysis of the oncology market, go directly to 5 Best Cancer Stocks to Buy Now.
Due to the COVID-19 pandemic, the oncology segment of the market saw a slight impact. The screening and oncology care services saw a decline in priority as governments worldwide scrambled to stop the virus spread. However, it did not impact the sales of oncology drugs. According to AstraZeneca PLC (NASDAQ:AZN)’s 2020 report, the overall revenue increased by 17% for the company and the oncology segment realized a 34% growth.
Oncology is one of the biggest and fastest growing sectors for biopharmaceuticals R&D. The oncology product pipeline has more than doubled since 2011. In 2021 alone, there were 930 products under development for rare cancers. Furthermore, the global number of treated patients has increased by 4% in the last 5 years. According to Fortune Business Insights, the oncology drug market size was valued at $141.33 billion in 2019 and it is expected to reach $394.24 billion in 2027 at a CAGR of 11.6%.
In 2022, the best cancer stocks include some notable names such as Johnson & Johnson (NYSE:JNJ), Merck & Co., Inc. (NYSE:MRK), and AbbVie Inc. (NYSE:ABBV).
Our Methodology
We scanned the database of close to 900 hedge funds tracked by Insider Monkey as of the end of the second quarter and picked 10 most popular companies working on cancer treatments. These stocks also have strong growth catalysts and and bullish analyst ratings from the Wall Street.
10. AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO)
Number of Hedge Fund holders: 9
AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) is a Boston-based pharmaceutical company primarily focusing on oncology. As of Q2 2022, 9 hedge funds had a stake in the company with a combined value of $38.717 million. AIGH Investment Partners was the most prominent stakeholder in AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) in the quarter with over 2.9 million shares, worth $19.336 million.
AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO)’s most significant drug, Tivozanib, was disapproved by the FDA in 2019 and later received approval in 2021. Since then, the company has posted impressive returns. The company revenue represented a 230% growth on a YoY basis in the latest June quarter and Tivozanib’s net sales were up 271% to $25 million. In addition, the management updated its FY2022 Tivozanib net product revenue guidance to $110 million from $100 million.
On August 4, SVB Securities analyst Andy Berens maintained a Buy rating on AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) with a $15 price target. Here is what the analyst said in a research note:
“We believe this revision may drive additional growth, although the company noted they are still in a review process to integrate the NCCN upgrade into their promotional materials. The 2L RCC trial evaluating Fotivda + Opdivo, TiNivo-2, remains on track to complete enrollment in 2Q23. The company has decided to focus on commercial efforts and early-stage compounds that they can eventually partner, which has led to a revised FY22 R&D expense guidance of $50mn, down from $60mn-$70mn previously. In an effort to streamline the R&D expenses, the company announced that they are discontinuing further enrollment in the Phase 1b/2 DEDUCTIVE trial cohort B of Fotivda + Imfinzi in 2L hepatocellular carcinoma [HCC] patients, and will not elect to fund a 1L Phase 3 trial.”
9. Puma Biotechnology, Inc. (NASDAQ:PBYI)
Number of Hedge Fund holders: 11
Puma Biotechnology, Inc. (NASDAQ:PBYI) is a Los Angeles-based biopharmaceutical company primarily focusing on cancer care, especially breast cancer.
As of September 20, Puma Biotechnology, Inc. (NASDAQ:PBYI) has worldwide rights to alisertib, a selective, small-molecule, orally administered inhibitor of aurora kinase A. The drug has been tested in clinical trials with metastatic cancers. The company is one of the best stocks due to its potential market penetration in two different forms of cancer. If alisertib gets approval from FDA, Puma Biotechnology, Inc. (NASDAQ:PBYI) has the potential to capture a significant market share in the breast cancer segment which is worth $17.9 billion, and the small cell lung cancer segment which is expected to grow to $21.44 billion in 2029 at a CAGR of 10%.
On August 5, H.C. Wainwright analyst Edward White reaffirmed a Buy rating on Puma Biotechnology, Inc. (NASDAQ:PBYI) with an $8 price target, down from 12.
8. Guardant Health, Inc. (NASDAQ:GH)
Number of Hedge Fund holders: 35
Guardant Health, Inc. (NASDAQ:GH) is an American diagnostics and research company, focusing on precision oncology. The company is the leading company in its respective sector and covers over $6 of the market share with a TAM of $80 billion.
Guardant Health, Inc. (NASDAQ:GH) was one of the stocks that suffered in the recent bear market. At the time of writing, the stock has gone down by 57% in the last 12 months. However, the stock fundamentals and growth catalysts make it a buy on the current weakness. In May 2018, the company joined hands with Softbank in a JV to expand the company’s liquid biopsy in Asia, Africa, and the Middle East. In June, Guardant Health, Inc. (NASDAQ:GH) purchased all of the shares owned by SoftBank taking control over the complete operations in 41 countries.
On August 24, Credit Suisse analyst Dan Leonard told the investors that Guardant Health, Inc. (NASDAQ:GH) is the best way to gain exposure to the growing market for next-generation tumor profiling. The analyst initiated coverage of Guardant Health, Inc. (NASDAQ:GH) with an Outperform rating and an $80 price target.
Here is what ClearBridge Investments had to say about Guardant Health, Inc. (NASDAQ:GH) in its Q3 2021 investor letter:
“Innovation within the health care sector has long been an area of focus in the Strategy and we plan to continue to maintain a meaningful overweight to the sector. That said, we expect this will be reflected in more diversified exposures beyond therapeutics companies. Some of the emerging areas of interest include diagnostics, life science tools, labs and other related services, where we own liquid biopsy leader Guardant Health and are working to build new holdings.”
7. Jazz Pharmaceuticals plc (NASDAQ:JAZZ)
Number of Hedge Fund holders: 40
Jazz Pharmaceuticals plc (NASDAQ:JAZZ) is an Irish biopharmaceutical company that primarily focuses on sleep-related health issues and oncology. According to the hedge fund data tracked by Insider Monkey, 40 hedge funds were bullish on the company in Q2 2022, compared to 38 in the previous quarter.
Jazz Pharmaceuticals plc (NASDAQ:JAZZ)’s monopoly on narcolepsy drugs makes it a fairly defensive and stable stock. Almost 200,000 people in the United States suffer from it and there is no cure for it. Jazz Pharmaceuticals plc (NASDAQ:JAZZ) offers medication that reduces its symptoms and there are no competitors so it ensures a steady stream of revenue for the company.
The oncology segment of Jazz Pharmaceuticals plc (NASDAQ:JAZZ) represents 25% of the company’s total revenue and in the June quarter, the segment’s revenue was up by 40% on a YoY basis.
On August 5, H.C. Wainwright analyst Oren Livnat maintained a Buy rating on Jazz Pharmaceuticals plc (NASDAQ:JAZZ)’s shares and lowered the price target to $204 from $210. The analyst believes that the company earnings “will likely trounce guidance” in case there is Xyrem generic until the beginning of 2023.
6. AstraZeneca PLC (NASDAQ:AZN)
Number of Hedge Fund holders: 47
AstraZeneca PLC (NASDAQ:AZN) is a pharmaceutical and biotechnology company headquartered in Cambridge, UK. The company’s most significant sectors are oncology and biopharmaceuticals.
AstraZeneca PLC (NASDAQ:AZN) still has strong fundamentals, a stable balance sheet. The teetering of the stock presents a good time to buy. The stock is down 10% in the past 30 days. The company holds a strong pricing power and in the second quarter of 2022, the company recorded gross margins of 83% on a core basis. For H1 2022, AstraZeneca PLC (NASDAQ:AZN) reported EPS growth of 43% and sales growth of 41%.
At the end of August, Argus analyst Jasper Hellweg upgraded AstraZeneca PLC (NASDAQ:AZN) to Buy from Hold with a $75 price target. The analyst believes that the company has shown “impressive growth” and views the recent multiple new product approvals in a positive light.
Here is what Carillon Tower Advisers had to say about AstraZeneca PLC (NYSE:AZN) in its Q1 2022 investor letter:
“AstraZeneca (NYSE:AZN) performed strongly and reported encouraging fourth-quarter earnings and initial 2022 guidance. AstraZeneca also announced positive clinical data for two drugs within its oncology business that should serve as important long-term growth drivers.”
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Disclosure: None. 10 Best Cancer Stocks to Buy Now is originally published on Insider Monkey.