In this article, we will be taking a look at the 10 Most Undervalued Pharma Stocks To Buy Now.
Pharmaceutical manufacturing in the U.S. has declined sharply over recent decades, with most active ingredient production shifting overseas due to lower labor costs. In 2023, the U.S. imported about $203 billion worth of pharmaceuticals, roughly 73% from Europe, especially Germany, Ireland, and Switzerland. However, change may be on the horizon: on May 5, CNBC reported that President Trump signed an executive order to encourage domestic drug production by streamlining site approvals and introducing potential tariffs on imports.
Trump’s order instructs the FDA to speed up U.S. drug manufacturing approvals by cutting unnecessary steps and supporting domestic companies early on. It also raises inspection fees for foreign plants and tightens enforcement on reporting active ingredient sources. FDA Commissioner Marty Makary noted the agency can now perform more inspections, including unannounced visits to overseas sites, using existing resources. Makary said:
“We had this crazy system in the United States where American pharma manufacturers .. are put through the ringer with inspections, and the foreign sites get a lot easier with scheduled visits, while we have surprise visits.”
The White House estimates it takes 5 to 10 years to build new pharmaceutical manufacturing capacity, an “unacceptable” delay for national security. President Trump addressed the issue in a fact sheet:
“We don’t want to be buying our pharmaceuticals from other countries because if we’re in a war, we’re in a problem, we want to be able to make our own. As we invest in the future, we will permanently bring our medical supply chains back home. We will produce our medical supplies, pharmaceuticals, and treatments right here in the United States.”
Trump’s executive order directs the FDA and EPA to fast-track pharmaceutical facility construction in the U.S., ahead of potential tariffs on imported drugs. While some companies are investing in domestic manufacturing, others warn that tariff threats may hurt R&D and production plans. According to GlobalData (via CNBC), reshoring could strengthen the supply chain but may also raise drug prices and production costs.
A closeup of pills in a pharmacy, representing the high quality medications of the company.
Our Methodology
For our methodology, using stock analysis, we filtered pharma stocks with a market cap over 2 billion and a P/E ratio under 20. We ranked the top stocks based on their PE ratios as of July 18.
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).
10. Organon & Co. (NYSE:OGN)
P/E Ratio: 3.35
Organon & Co. (NYSE:OGN), a global healthcare company specializing in women’s health, biosimilars, and established brands, underwent major changes in 2025. On May 1, the company slashed its quarterly dividend from $0.28 to $0.02 per share (annualized from $1.12 to $0.08) to prioritize debt reduction following its $1.2 billion acquisition of Dermavant in late 2024. This shift led to a 27% drop in stock price and a shareholder lawsuit alleging securities fraud due to prior reassurances about maintaining the dividend.
In April, Organon & Co. (NYSE:OGN) laid off 93 employees at its Jersey City headquarters, part of an ongoing global restructuring that began in 2023 and impacted around 5% of the workforce in early 2025. The restructuring responds partly to the loss of exclusivity for Atozet, the company’s second-largest product, which saw sales drop 9% in 2024, with continued decline expected.
That same month, the corporation acquired U.S. commercial rights to TOFIDENCE, a biosimilar to ACTEMRA (tocilizumab), from Biogen, expanding its immunology biosimilars portfolio. Organon & Co. (NYSE:OGN) will pay upfront fees, royalties, and milestone payments, while Bio-Thera Solutions retains U.S. manufacturing rights. TOFIDENCE enters a competitive space alongside Celltrion’s Avtozma and Fresenius Kabi’s Tyenne.
On June 12, the business partnered with Evvy to increase access to XACIATO (clindamycin phosphate) vaginal gel 2%, reaffirming its women’s health focus. Its flagship product, Nexplanon, posted 14% growth last quarter.
In leadership news, Ramona A. Sequeira, President at Takeda, will join the company’s Board on July 1, serving on the Talent Committee, as the company continues its strategic transformation.
9. Sanofi (NASDAQ:SNY)
P/E Ratio: 8.92
Sanofi (NASDAQ:SNY), a global biopharmaceutical leader headquartered in France with about 83,000 employees, is focused on immunology, oncology, rare diseases, and vaccines. The company continues to expand its innovative pipeline through internal research and strategic acquisitions.
In June 2025, Sanofi (NASDAQ:SNY) announced its largest deal of the year, a $9.5 billion acquisition of U.S.-based Blueprint Medicines. This strategic move strengthens the company’s position in rare immunological diseases. Blueprint adds to the business’s portfolio Ayvakit/Ayvakyt (avapritinib), the only approved treatment for systemic mastocytosis (SM) in the U.S. and EU, along with promising pipeline assets like elenestinib and BLU-808, both targeting KIT-driven and other immune-related conditions.
The acquisition also enhances the corporation’s reach through Blueprint’s existing relationships with allergists, dermatologists, and immunologists, aligning well with Sanofi (NASDAQ:SNY)’s goal to become a top player in immunology. CEO Paul Hudson called the deal a major step toward building a global immunology powerhouse.
This move complements the company’s existing success with Dupixent (dupilumab), its flagship immunology drug, recently approved in the U.S. as the first targeted treatment for bullous pemphigoid.
In addition, the business plans to invest at least $20 billion in the U.S. by 2030 to boost R&D, manufacturing, and new medicine launches, supporting growth and improving supply chain resilience.
8. United Therapeutics Corporation (NASDAQ:UTHR)
P/E Ratio: 11.84
United Therapeutics Corporation (NASDAQ:UTHR) is among the most undervalued stocks to invest in. It is a biotechnology company focused on treating pulmonary arterial hypertension (PAH) and advancing organ transplantation alternatives through xenotransplantation and regenerative medicine.
On June 23, 2025, United Therapeutics Corporation (NASDAQ:UTHR) announced the completion of enrollment in its Phase 3 ADVANCE OUTCOMES trial for ralinepag, a once-daily oral prostacyclin receptor agonist for PAH. The trial enrolled 728 patients, and top-line data is expected in the first half of 2026. Ralinepag showed strong Phase 2 results, significantly reducing pulmonary vascular resistance, a key marker of disease progression.
The successful enrollment marks a major milestone as ralinepag could become a new standard of care, offering a more convenient and potentially more effective oral therapy for PAH. This move strengthens the company’s leadership in PAH, complementing its existing Tyvaso franchise and advancing its pipeline of differentiated therapies aimed at improving patient outcomes.
United Therapeutics Corporation (NASDAQ:UTHR) is also presenting long-term ralinepag data at leading scientific conferences, reinforcing its commitment to transparency and scientific rigor. While exploring related areas such as idiopathic pulmonary fibrosis (IPF) and organ transplant innovations, the company’s near-term focus remains firmly on transforming PAH treatment through innovative, patient-friendly therapies.
7. Merck & Co., Inc. (NYSE:MRK)
P/E Ratio: 11.85
Merck & Co., Inc. (NYSE:MRK), a global biopharmaceutical leader headquartered in Rahway, New Jersey, is renowned for its innovation in oncology, vaccines, and specialty medicines.
In June 2025, the FDA approved KEYTRUDA for perioperative use in adults with resectable, locally advanced head and neck squamous cell carcinoma (HNSCC) expressing PD-L1 (CPS ≥1). This marks the first approval of an anti-PD-1 therapy in the perioperative setting, allowing use both before and after surgery, combined with radiotherapy and as a standalone treatment. This milestone supports the company’s strategy to move immunotherapy into earlier stages of cancer care.
Merck & Co., Inc. (NYSE:MRK) is also expanding its oncology pipeline, sharing promising updates on KRAS G12C inhibitor MK-1084, zilovertamab vedotin, and sacituzumab tirumotecan, as well as new analyses of KEYTRUDA across over 25 cancer types.
To meet growing demand and support biologics innovation, Merck & Co., Inc. (NYSE:MRK) began construction of a $1 billion Biologics Center of Excellence in Wilmington, Delaware, in April 2025. The 470,000-square-foot facility will focus on next-gen biologics and serve as the U.S. manufacturing hub for KEYTRUDA, bolstering supply chain resilience and production capacity.
6. Biogen Inc. (NASDAQ:BIIB)
P/E Ratio: 12.72
Biogen Inc. (NASDAQ:BIIB) is a global biotechnology leader known for its treatments in multiple sclerosis (MS), spinal muscular atrophy (SMA), Alzheimer’s disease, and an expanding portfolio in rare and pediatric neurological disorders.
On June 18, 2025, Biogen Inc. (NASDAQ:BIIB) began a global Phase 3 pediatric trial of omaveloxolone for Friedreich’s ataxia, a rare inherited neurodegenerative disease. The company is actively diversifying beyond its traditional MS business, which has seen declining revenues due to increased competition. Now, 45% of its revenue comes from non-MS products, including Skyclarys for Friedreich’s ataxia and Leqembi for early Alzheimer’s disease. This strategic shift has prompted some analysts to consider Biogen among the most undervalued stocks in biotech, given its deep pipeline and potential in rare disease markets.
The company is also progressing felzartamab, an antibody therapy acquired through HI-Bio, into Phase 3 trials for IgA nephropathy and kidney transplant rejection. Early results show promising, sustained effects in kidney function, positioning felzartamab as a potential new treatment standard in immune-mediated diseases.
In February 2025, Biogen Inc. (NASDAQ:BIIB) formed a partnership with Stoke Therapeutics to develop zorevunersen for Dravet syndrome, a rare genetic epilepsy, further strengthening its rare disease pipeline through external innovation.
The corporation’s international expansion of Skyclarys into the U.K. and Brazil and its deepening focus on underserved neurological conditions reflect a clear strategic shift. As CEO Chris Viehbacher put it, “There’s a new Biogen emerging”—one that’s reshaping its future through targeted innovation in rare and pediatric neuroscience.
5. AstraZeneca PLC (NASDAQ:AZN)
P/E Ratio: 13.94
AstraZeneca PLC (NASDAQ:AZN), a global biopharmaceutical company headquartered in Cambridge, UK, operates in over 130 countries with more than 80,000 employees. Formed in 1999 through the merger of Astra AB and Zeneca Group, the company is a leader in oncology, rare diseases, and biopharmaceuticals, with R&D hubs in Cambridge (UK), Gothenburg (Sweden), and Gaithersburg (US).
A major recent milestone for the company is the U.S. FDA approval of Datroway (datopotamab deruxtecan) for patients with EGFR-mutated, previously treated non-small cell lung cancer (NSCLC). Datroway is the first TROP2-directed antibody-drug conjugate approved for this indication and offers improved progression-free and overall survival compared to chemotherapy, based on results from the Phase III TROPION-Lung01 trial. The drug was co-developed with Daiichi Sankyo, showcasing AstraZeneca PLC (NASDAQ:AZN)’s focus on collaborative innovation.
This approval strengthens the company’s extensive oncology portfolio, which includes Tagrisso, Imfinzi, and Enhertu, and supports its leadership in targeted cancer therapies.
Beyond lung cancer, AZN is advancing treatments across other cancers. The SERENA-6 trial showed positive Phase III results for camizestrant, an oral SERD for HR-positive breast cancer, while the MATTERHORN trial reported promising data for Imfinzi in early-stage gastric and gastroesophageal junction cancers.
AstraZeneca PLC (NASDAQ:AZN) continues to drive global oncology research, regularly presenting plenary data at leading medical conferences like ASCO, reflecting its position at the forefront of cancer innovation.
4. Alkermes plc (NASDAQ:ALKS)
P/E Ratio: 14.05
Alkermes plc (NASDAQ:ALKS) is a global biopharmaceutical company headquartered in Ireland, with U.S. operations in Massachusetts and Ohio, focused on treatments for psychiatric and neurological disorders, including schizophrenia, bipolar I disorder, opioid and alcohol dependence, and sleep disorders. Its key products include LYBALVI, ARISTADA, and VIVITROL, alongside a growing pipeline in neuroscience.
A major current focus is ALKS 2680, an oral orexin 2 receptor (OX2R) agonist in development for narcolepsy types 1 and 2 and idiopathic hypersomnia (IH). In April 2025, Alkermes plc (NASDAQ:ALKS) launched the Vibrance-3 Phase II trial, a global, placebo-controlled study evaluating ALKS 2680 in 96 adults with IH. Participants will be assessed using the Epworth Sleepiness Scale, with the option to join a long-term safety extension study.
The corporation will present new findings on ALKS 2680 at SLEEP 2025, held June 8–11 in Seattle, which highlights its commitment to orexin-targeted therapies and scientific transparency.
Unlike traditional stimulant or sedative-based treatments, ALKS 2680 is designed to restore natural wakefulness by directly targeting the brain’s orexin pathway. This precision-based approach may offer more durable, disease-modifying effects for patients with chronic sleep disorders.
With a self-funded model and a focus on high-unmet-need areas in neuroscience, Alkermes plc (NASDAQ:ALKS) continues to advance innovative therapies that aim to improve patient outcomes and reshape treatment standards in complex neurological conditions, making it one of the most undervalued stocks in the biotech sector.
3. Novartis AG (NYSE:NVS)
P/E Ratio: 16.74
Novartis AG (NYSE:NVS) is a Swiss pharmaceutical leader focused on developing innovative treatments across oncology, immunology, neuroscience, cardiovascular, and renal diseases. The company continues to invest heavily in research and development, aiming to deliver breakthrough medicines that improve patient outcomes worldwide.
The company’s Kisqali (ribociclib) has emerged as a major growth driver, with Q2 2025 sales surging 64% globally and 100% in the U.S. It targets metastatic breast cancer and is positioned as a potential blockbuster. Other notable therapies include Pluvicto for prostate cancer and Scemblix for chronic myeloid leukemia, both showing strong commercial momentum.
Novartis AG (NYSE:NVS) is expanding its presence in nephrology. Vanrafia (atrasentan) recently received FDA accelerated approval for reducing proteinuria in IgA nephropathy, marking a key advancement. Fabhalta (iptacopan), an oral treatment for C3 glomerulopathy, also gained approval. Ongoing trials include zigakibart, a Phase III candidate for IgAN, with results expected in 2026.
The business introduced Coartem Baby, a pediatric malaria treatment approved by Swissmedic. It addresses the unmet need for infants under 5 kg with a cherry-flavored, easily dissolvable formulation. Novartis AG (NYSE:NVS) plans to launch it on a not-for-profit basis in malaria-endemic regions.
The corporation has streamlined its pipeline around core therapeutic areas, with several Phase III trials in progress. These include remibrutinib for autoimmune diseases, ianalumab for lupus, and YTB323 for neuroimmunological disorders. The company expects 15 submission-enabling data readouts over the next two years, which underscores a robust late-stage pipeline.
2. Johnson & Johnson (NYSE:JNJ)
P/E Ratio: 17.46
Johnson & Johnson (NYSE:JNJ) is a global healthcare leader with a diverse portfolio across pharmaceuticals, medical devices, and consumer health. Its Innovative Medicine division focuses on treatments for complex diseases, while MedTech develops minimally invasive solutions in cardiovascular, orthopedic, surgical, and vision care.
In June 2025, Johnson & Johnson (NYSE:JNJ) reported promising Phase 1 results for pasritamig (JNJ-78278343), a first-in-class bispecific T-cell-engaging antibody for metastatic castration-resistant prostate cancer (mCRPC). The drug targets KLK2, a prostate cancer-specific biomarker, and showed early antitumor activity with low treatment-related side effects, indicating potential for safe outpatient use.
Other notable advances include a supplemental FDA application for STELARA to treat pediatric Crohn’s disease, and early Phase 1b data showing encouraging responses from bleximenib—a menin inhibitor—combined with venetoclax and azacitidine for genetically defined acute myeloid leukemia (AML).
In vision care, the company launched the first daily disposable multifocal toric contact lens for astigmatism: ACUVUE OASYS MAX 1-Day MULTIFOCAL.
Strategically, Johnson & Johnson (NYSE:JNJ) plans to invest $55 billion over four years to expand U.S.-based manufacturing and R&D, aligning with efforts to boost domestic production and supply chain resilience.
1. Prestige Consumer Healthcare Inc. (NYSE:PBH)
P/E Ratio: 17.51
Prestige Consumer Healthcare Inc. (NYSE:PBH) stands first among the most undervalued stocks. It is a leading marketer of over-the-counter (OTC) healthcare products, offering a wide range of personal wellness brands like Monistat, Summer’s Eve, Dramamine, Clear Eyes, and DenTek. Headquartered in Tarrytown, New York, the company operates across the U.S., Canada, Australia, and select international markets.
In 2025, a major development will be Prestige Consumer Healthcare Inc. (NYSE:PBH)’s digital transformation. By centralizing content management through platforms like Salsify, the company can now update product descriptions, images, and health information across retail partners like Walmart and Target within hours instead of weeks. This has improved product accuracy, boosted e-commerce visibility, and allowed the company to respond quickly to trends and regulations.
The company’s digital strategy also focuses on enhancing consumer engagement with lifestyle imagery and user-generated content, helping build stronger brand connections. The digital upgrade has made the corporation a more agile, tech-forward healthcare company ready to meet the growing demand for online health solutions.
Additionally, the business remains committed to quality and consumer safety. The call center fields over 75,000 consumer inquiries annually, which helps inform product innovation. Rigorous testing, compliance checks, and third-party audits ensure high standards across its supply chain.
By investing in digital tools and maintaining strong retailer relationships, Prestige Consumer Healthcare Inc. (NYSE:PBH) continues to build consumer trust and loyalty while leading in the evolving OTC healthcare market.
While we acknowledge the potential of PBH to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than PBH and that has 100x upside potential, check out our report about the cheapest AI stock.
READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
