In this article, we will be taking a look at the 10 best pharma stocks to buy for long term growth.
U.S. Pharma Turns to China for Drug Deals
With big American pharmaceutical corporations always searching for medications in China, the US pharmaceutical industry is going through a unique trend never seen before. About 30% of Big Pharma acquisitions involving at least $50 million upfront in 2024 involved Chinese corporations, according to DealForma statistics, as reported by CNBC. This was an increase from 20% the previous year and nearly 0% just five years before.
Experts cite several causes for this tendency. Some people think that Chinese pharmaceutical firms are drawing notice due to their sophisticated development skills, which enable them to produce potent compounds in large quantities. In addition to being able to start testing on human subjects more quickly, these Chinese companies can charge a lower price for these medications than the US. Buyers have developed a business strategy that enables them to import medicines through licensing agreements, according to CNBC. The dearth of venture capital in China is additional pressure on biotech companies to enter these agreements.
Experts think this situation is here to stay, even though there are several possible causes for this tendency. Although the US pharmaceutical industry is expected to be impacted, it is uncertain how these effects would manifest. If big pharmaceutical companies find a good Chinese drug at a low price, some experts think it may destroy American startups; others think the competition would benefit the sector. Tim Opler, a managing director in Stifel’s global healthcare group, stated the following regarding the circumstances:
“It’s kind of a watershed moment where the pharma industry is like, ‘We don’t really need to buy U.S. biotechs necessarily. We will if it makes sense, but we can buy perfectly good biotech assets through licensing deals with Chinese companies.”
Emily Field, Head of European Pharma Research at Barclays, spoke to 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, at least in the first half of this year, the industry might not perform poorly. The effectiveness of obesity medications is still up for debate, though, as leading companies in the field have shown inconsistent results in the past.
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.
A close-up of a staff member counting pills in a pharmaceutical warehouse.
Our Methodology
For this article, we screened for companies that operate in the pharmaceutical industry. From that list, we identified stocks that have achieved positive revenue growth over the past five years. Then, we picked companies with a 5-year revenue growth of 10% and ranked the top 10 based on hedge fund sentiment as of Q4 2024, as per Insider Monkey’s database.
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).
Here is our list of the 10 best pharmaceutical stocks to buy for long term growth.
10. Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH)
Number of Hedge Fund Holders: 23
Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) is a biopharmaceutical company that specializes in the development, manufacturing, marketing, and sale of generic and proprietary injectable, inhalation, and intranasal products. The company operates primarily in the United States, China, and France.
In the third quarter of 2024, Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) reported net revenues of $191.2 million, a 6% increase from the previous year. The introduction of Primatene Mist ($26.1 million), Baqsimi ($40.4 million), and Albuterol MDI ($40.4 million) was credited by the firm with this growth. Primatene Mist is on track to surpass $100 million in annual sales by the end of 2024, and the business plans to expand the Baqsimi market and strengthen its sales team, positioning itself tenth among the best pharmaceutical stocks to watch.
Despite a drop in adjusted net income to $49.6 million ($0.96 per share) due to lower gross margins (53% vs. 60% in 2023) and higher operating expenses, Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) generated $60 million in cash flow and repurchased $35 million worth of shares. Additionally, the company initiated a $50 million share buyback program. Ongoing discussions with the FDA over its insulin pipeline are expected to fuel future growth.
As of Q4 2024, 23 hedge funds held stakes in the stock, as tracked by the Insider Monkey database.
9. Amneal Pharmaceuticals, Inc. (NASDAQ:AMRX)
Number of Hedge Fund Holders: 26
Amneal Pharmaceuticals, Inc. (NASDAQ:AMRX) was founded in 2002 and is based in Bridgewater, New Jersey. The company has operations in the U.S., India, and Ireland. It develops and distributes a wide range of generic and specialty pharmaceutical products, focusing on complex generics, injectables, biosimilars, and treatments for CNS and endocrine disorders. The company’s product offerings include oral solids, injectables, nasal sprays, and transdermal patches, sold to wholesalers, pharmacies, hospitals, and government agencies through its AvKARE segment.
Amneal Pharmaceuticals, Inc. (NASDAQ:AMRX) delivered strong financial results for Q4 and full-year 2024, with revenue reaching $731 million in Q4—an 18% year-over-year increase—and $2.8 billion for the year, up 17% from 2023. This growth was fueled by solid performance across all segments, including Affordable Medicines, Specialty, AvKARE, and Biosimilars. Adjusted EBITDA also rose to $155 million for Q4 and $627 million for the year, which reflected a 12% increase, driven by improved operational efficiency and cost control.
Amneal Pharmaceuticals, Inc. (NASDAQ:AMRX) made significant progress in deleveraging, reducing its net leverage from 4.8x to 3.9x. Segment-wise, Affordable Medicines generated $1.7 billion in revenue, a 15% annual increase, while Specialty revenues grew 14%, boosted by successful product launches like CREXONT. AVKARE saw a 25% revenue increase in 2024, and biosimilar revenue surged by 49% year-over-year in Q4. Its operating cash flow totaled $348 million for the year (excluding one-time legal costs), and the company achieved an adjusted gross margin of 42.4%.
Looking ahead to 2025, Amneal Pharmaceuticals, Inc. (NASDAQ:AMRX) projects revenue between $3.0 to $3.1 billion and an adjusted EBITDA of $650 to $675 million, representing continued growth. The adjusted EPS forecast is $0.65 to $0.70, signaling investor confidence in its trajectory.
Investors remain bullish on the stock due to its strong product pipeline and strategic initiatives. The launch of CREXONT has already captured 1% of the market within four months and is expected to exceed 3% by year-end. Among the best pharmaceutical stocks, the business’s entry into the fast-growing weight loss and obesity market—through a collaboration with Metsera—positions the company for long-term growth. By targeting the booming GLP-1 receptor agonist market, the company aims to launch GLP-1 peptides globally, including in the U.S., by 2028, expanding its footprint and diversifying its portfolio.
8. Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN)
Number of Hedge Fund Holders: 27
Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN) is a specialty company focused on developing and selling medications for central nervous system (CNS) diseases, including epilepsy, migraine, ADHD, and Parkinson’s disease. With well-known medications like Qelbree for ADHD, Trokendi XR and Oxtellar XR for epilepsy, as well as treatments for Parkinson’s disease, including Apokyn and Gocovri, the firm has established a significant position in the CNS market.
Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN) achieved impressive financial results for the third quarter of 2024. The company’s overall revenues increased by 14% to $175.7 million. Due to the success of important goods like Qelbree and Gocovri, net product sales increased to $170.3 million. In contrast to a loss during the same time the previous year, operating earnings increased to $40.9 million, and net earnings rose dramatically to $38.5 million, or $0.69 per diluted share.
In Q3 2024, the company’s sales of the non-stimulant ADHD medication Qelbree increased by 68% to $62.4 million. To position itself for future growth in the CNS market, Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN) is also adding promising therapeutic candidates to its pipeline, such as SPN-830, SPN-817, and SPN-820.
7. Pacira Biosciences, Inc. (NASDAQ:PCRX)
Number of Hedge Fund Holders: 30
Pacira BioSciences, Inc. (NASDAQ:PCRX) is a specialty pharmaceutical company focused on developing non-opioid pain management solutions, with its primary product being Exparel, a long-acting local analgesic for postsurgical pain. The business sells Exparel directly to medical facilities such as hospitals and surgery centers. Because of its dedication to non-opioid medicines, the company stands out in the business. The company wants to solve the opioid crisis and decrease opioid consumption by providing safer options for pain management.
Pacira BioSciences, Inc. (NASDAQ:PCRX) reported a record total revenue of $701 million for 2024, which was driven by solid sales performance across its key products. EXPAREL led the way with $147.7 million in revenue, followed by ZILRETTA at $33.1 million and iovera at $6.5 million—all showing steady growth from the previous year. The company reported a strong non-GAAP gross margin of 79% for Q4 and ended the year with $485 million in cash and investments.
Looking ahead, Pacira BioSciences, Inc. (NASDAQ:PCRX) projects 2025 revenue between $725 million and $765 million. This growth outlook is supported by expanding demand for its non-opioid pain management solutions, a market that continues to grow amid rising awareness of opioid addiction risks. As one of the best pharmaceutical stocks focused on innovative pain therapies, Pacira is positioning itself for long-term growth. While SG&A expenses increased due to investments in commercial and medical operations, these initiatives are expected to support long-term growth and broader market access.
Investor confidence is bolstered by the company’s strategic focus on innovation and access. The company received the RMAT designation from the FDA for PCRX-201, backed by promising two-year Phase 1 data. Additionally, the business has secured separate CMS coverage and product-specific reimbursement codes for both EXPAREL and iovera, simplifying billing and improving accessibility. These developments, alongside a strong product lineup and commitment to non-opioid therapies, position Pacira BioSciences, Inc. (NASDAQ:PCRX) for continued success in the evolving pain management landscape.
6. AstraZeneca PLC (NASDAQ:AZN)
Number of Hedge Fund Holders: 55
AstraZeneca PLC (NASDAQ:AZN) stands sixth on our list of the best pharmaceutical stocks. It was incorporated in 1992 and is based in Cambridge, UK. The company is focused on discovering, developing, and delivering prescription medicines for cancer, heart and kidney diseases, respiratory conditions, and rare diseases.
AstraZeneca PLC (NASDAQ:AZN) revealed intentions on March 21 to create a research and development facility in Beijing, China, with an incremental investment of $2.5 billion spread over five years. This will strengthen collaborations in China’s life sciences industry and serve as the company’s second research and development site there. The company will establish its first vaccine manufacturing facility in China, collaborate with regional biotechs and medical facilities, and construct a new lab dedicated to artificial intelligence.
The net cash from the operating activities of AstraZeneca PLC (NASDAQ:AZN) increased by $1.5 billion in 2024. Along with paying off over $7 billion in debt, it also grew its business through significant acquisitions like Amolyt, Icosavax, and Fusion. In 2024, the dividend was raised to $3.10 per share, and this year, they are expected to rise to $3.20. It is among the top stocks in the UK.
In Q4 2024, AstraZeneca PLC (NASDAQ:AZN) was included in 14 billionaire portfolios with a total of $2.20 billion in combined positions, while 55 hedge funds were positive on the company overall. In Q4, billionaire Ken Griffin increased his holdings of AZN by an astounding 842%, accumulating 4.2 million shares for $276.6 million.
5. Novo Nordisk A/S (NYSE:NVO)
Number of Hedge Fund Holders: 64
Novo Nordisk A/S (NYSE:NVO) is a Denmark-based global healthcare company specializing in the development, manufacturing, and marketing of pharmaceutical products for chronic diseases. Its main areas of interest are managing obesity, diabetes, and uncommon illnesses such as growth abnormalities and hemophilia. With well-known medications, including Ozempic, Wegovy, and NovoRapid, the company is a world leader in insulin and GLP-1 therapy.
With a 26% increase in sales and a 26% increase in operating profit at constant exchange rates, Novo Nordisk A/S (NYSE:NVO) produced impressive financial results in 2024. More than 45 million individuals are now receiving diabetes and obesity medicines from the corporation, an increase of nearly 4 million patients over the previous year. To boost market supply beyond pre-existing CMO contracts from 2026, the company will be able to extend its worldwide fill and finish footprint from 11 to 14 sites after completing the acquisition of three Catalent production sites in December 2024. The corporation’s R&D efforts produced several noteworthy obesity treatment readouts, such as amycretin, semaglutide 7.2 milligrams, and CagriSema.
At constant exchange rates, Novo Nordisk A/S (NYSE:NVO) anticipates sales growth of 16% to 24% in 2025, mostly due to the volume increase of GLP-1-based therapies for the treatment of diabetes and obesity. At constant exchange rates, operating profit is anticipated to increase by 19% to 27%, reflecting ongoing expenditures in commercial, R&D, and other activities. Over 80% of patients pay less than $25 for a prescription, and the firm retains extensive formulary access for Wegovy in the US, covering 55 million obese individuals.
4. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 85
AbbVie Inc. (NYSE:ABBV) is a research-based pharmaceutical company that develops and sells products to treat chronic diseases in oncology, gastroenterology, rheumatology, dermatology, virology, and various other serious health conditions.
In addition to having solid fundamentals, AbbVie Inc. (NYSE:ABBV) made $15.1 billion in fiscal Q4 2024, which was 5.6% higher than analysts had predicted. The company’s ex-Humira platform, a group of medications in its pharmaceutical portfolio, was credited with this expansion. The platform increased sales by over 18% throughout the course of the year, and in fiscal Q4 2024, revenue growth accelerated to 22%.
Because of its two popular medications, Skyrizi and Rinvoq, analysts are upbeat about AbbVie Inc. (NYSE:ABBV)’s growth. As one of the best pharmaceutical stocks, the yearly sales of these medications—which treat inflammatory bowel disorders, psoriatic illnesses, rheumatology, and dermatology—are expected to surpass $27 billion by 2027. In addition, the company declared a 5.8% dividend increase that would take effect in February 2025, carrying on the company’s 12-year dividend growth pattern.
Polaris Capital Management said the following about AbbVie Inc. (NYSE:ABBV) in its Q3 2024 investor letter:
“US biopharma/biotech companies topped the health care sector, with the majority of holdings posting returns over 10%. AbbVie Inc. (NYSE:ABBV) showed positive top-line growth from its immunosuppressive drugs, Skyrizi and Rinvoq. Abbvie’s management continues to work through the loss of exclusivity from Humira, switching patients to Skyrizi or Rinvoq rather than Humira biosimilars.”
3. Bristol-Myers Squibb Company (NYSE:BMY)
Number of Hedge Fund Holders: 88
Bristol-Myers Squibb Company (NYSE:BMY) is a biopharmaceutical company that discovers, develops, and delivers advanced medicines for serious diseases. Numerous therapeutic classes, such as hematology, oncology, cardiology, immunology, and neuroscience, are represented among its medications.
Due to its collaborations and acquisitions, Bristol-Myers Squibb Company (NYSE:BMY) has a strong pipeline and a strong medicine portfolio, which together provide a broad economic moat. For example, its pipeline was reinforced by the acquisition of Celgene, giving it a solid foothold in the blood cancer market. The recent acquisitions of neurology company Karuna and cancer companies RayzeBio and Mirati by the company have strengthened the company’s pipeline overall.
Bristol-Myers Squibb Company (NYSE:BMY) has also demonstrated impressive dividend growth, outpacing the sector median of two years by 300%. The company has paid regular dividends for 93 consecutive years while maintaining a 16-year streak of dividend growth. This illustrates the business’s sound financial standing and capacity to provide value to investors.
2. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 91
Merck & Co., Inc. (NYSE:MRK) is a biopharmaceutical company that delivers health solutions to advance the treatment and prevention of diseases in animals and people. Vaccines and pharmaceutical goods for human health, which usually include therapeutic and preventive substances, are available through its pharmaceutical section. Its Animal Health division creates, finds, produces, and sells a variety of vaccinations and veterinary medications.
Merck & Co., Inc. (NYSE:MRK)’s sales outlook is being adversely affected by certain factors. For example, because of low discretionary spending, it has temporarily halted the distribution of its HPV vaccine Gardasil to China until the middle of 2025. The company maintains excellent operations despite these short-term difficulties, which are bolstered by high demand for its inventive and varied portfolio. The corporation’s Keytruda cancer treatment medication is doing well, and the introduction of Winrevair, a medication for pulmonary arterial hypertension (PAH), is also helping to increase revenue growth.
Asad Haider, a Goldman Sachs analyst, remained optimistic about the stock and rated it as a Buy on April 8. The analyst feels that Merck & Co., Inc. (NYSE:MRK)’s Animal Health division, which makes a substantial amount of money and is expected to expand in the future, is being undervalued by the present market valuation, which is unduly gloomy. As one of the best pharmaceutical stocks, the analyst believes that this offers investors a mispricing opportunity.
GreensKeeper Asset Management, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:
“Merck & Co., Inc. (NYSE:MRK) was our second-largest detractor this quarter, declining -8.3%. MRK’s leading HPV vaccine, GARDASIL 9, faced challenges internationally due to inventory buildup within its Chinese distributor, which is expected to reduce shipments for the remainder of 2024. Despite this short-term impact, the long-term outlook for GARDASIL 9 remains promising. Meanwhile, the company’s $27 billion Keytruda cancer juggernaut continues to grow at a healthy clip, powering earnings growth.”
1. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 115
Eli Lilly and Company (NYSE:LLY) tops our list for being one of the best pharmaceutical stocks. It develops, manufactures, discovers, and sells pharmaceutical products. These goods cover immunology, neurology, diabetes, oncology, and other treatments. Due to the company’s robust financials and its in-demand GLP-1 medications, which are still in the early stages of development and are used to treat diabetes and obesity, investors are optimistic about the company.
Eli Lilly and Company (NYSE:LLY) operates well, and in fiscal 2024, it announced a revenue increase of 32% on a YoY basis, surpassing its initial projection by $4 billion. In fiscal Q4 2024, the corporation achieved significant strides in all of its strategic deliverables. The company’s Mounjaro and Zepbound medications saw great acceptance, which helped revenue climb by 45% during the quarter.
The company formed a partnership with AdvanCell on February 10 to use targeted alpha treatments to improve cancer treatment. The partnership intends to accelerate clinical development for novel radiopharmaceuticals by fusing AdvanCell’s Pb-212 production technology and infrastructure with Eli Lilly and Company (NYSE:LLY)’s experience in medication manufacture. The corporation is anticipated to have a great chance to investigate Pb-212-based treatments and expand its line of cancer treatments.
Tim Anderson of Bank of America Securities maintained a Buy rating on Eli Lilly and Company (NYSE:LLY) in a report published on April 9. A 37.73% increase from current levels is implied by its consensus price objective of $736.93. LLY received special attention in the Q4 2024 investor letter from Aristotle Atlantic Partners, LLC. This is what the company says:
“Eli Lilly and Company (NYSE:LLY) contributed to performance in the fourth quarter. While shares underperformed, our underweight position versus the benchmark resulted in a positive contribution to relative returns. Lilly shares were weak following an uncharacteristic third-quarter earnings miss driven by softer-than-expected sales of its blockbuster diabetes and obesity drugs. The company blamed this partly on wholesaler destocking. Lilly reinforced its view that end demand for the drugs remains strong”.
Overall, LLY ranks first among the 10 best pharma stocks to buy for long term growth. While we acknowledge the potential of pharmaceutical companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than LLY but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
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