In this article, we will look at the 11 Cheap Pharmaceutical Stocks to Buy Now.
The White House announced on Thursday that President Trump sent 17 major pharmaceutical companies letters delineating the steps they should take to decrease the prices of US prescription drugs to “most favored nation” (MFN) levels by September 29.
CNBC reported on August 1 that the ultimatum sent pharma companies “scrambling to respond” as President Trump demanded “binding commitments” to bring drug prices down, adding that if the companies “refuse to step up,” the government would not refrain from employing every tool in its “arsenal to protect American families from continued abusive drug pricing practices.” The government, however, did not declare what these measures might be.
The 17 major pharma companies that received letters included Amgen, AbbVie, AstraZeneca, Eli Lilly, Boehringer Ingelheim, Bristol-Myers Squibb, EMD Serono, Roche’s subsidiary Genentech, GSK, Merck, Pfizer, Gilead, Johnson & Johnson, Novo Nordisk, Novartis, Sanofi, and Regeneron.
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President Trump also informed the companies that they must provide MFN prices to all Medicaid patients, which is the American health program for low-income patients. In addition, the companies were told to refrain from offering medicines to developed markets at better prices compared to those offered in the US.
The pharma companies were also told that they should sell the medications directly to American patients, eliminating the pharmacy middlemen known as pharmacy benefit managers (PBMs).
Commenting on the situation, analysts led by Seiji Wakao told clients in a note:
“While the government’s latest announcement may appear harsh, we think it is likely that the matter is being discussed to some extent between the companies and the government, and we believe no changes that would have a significant negative impact on pharmaceutical companies will occur in the short term.”
JPMorgan analysts also released a note on Friday, stating that although the fresh ultimatum was delivered as a stark warning, pharma companies may get some time to respond due to the ongoing talks with the US administration.
With these trends in view, let’s look at the top cheap pharmaceutical stocks to buy now.
A technician recording data from a complex experiment involving pharmaceutical products.
Our Methodology
We used Finviz to make a list of pharmaceutical stocks with a forward P/E less than 15 and selected the top 11 with the highest number of hedge fund holders as of Q1 2025. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund holders.
Note: All data was sourced on August 2.
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).
11 Cheap Pharmaceutical Stocks to Buy Now
11. Novartis AG (NYSE:NVS)
Forward P/E: 12.64
Number of Hedge Fund Holders: 33
Novartis AG (NYSE:NVS) is one of the top cheap pharmaceutical stocks to buy now. In a report released on August 1, Florent Cespedes from Bernstein maintained a Buy rating on Novartis AG (NYSE:NVS) with a price target of CHF108.00.
The rating update followed Novartis AG’s (NYSE:NVS) release of fiscal Q2 2025 results on July 17, reflecting a strong quarter with core operating income growth and double-digital sales.
Novartis AG (NYSE:NVS) reported $14.1 billion in net sales for the quarter, with volume contributing 12 percentage points to growth.
Operating income rose to $4.9 billion, primarily driven by higher net sales. Net income also grew to $4.0 billion, attributed to higher operating income.
Novartis AG (NYSE:NVS) further reported that core operating income margin was 42.2% of net sales, growing 2.6 percentage points.
Headquartered in Basel, Switzerland, Novartis AG (NYSE:NVS) develops, markets, and manufactures a range of healthcare products. Its operations span the Innovative Medicines, Sandoz, and Corporate segments.
10. United Therapeutics Corporation (NASDAQ:UTHR)
Forward P/E: 9.71
Number of Hedge Fund Holders: 43
United Therapeutics Corporation (NASDAQ:UTHR) is one of the top cheap pharmaceutical stocks to buy now. H.C. Wainwright analyst Andrew Fein reiterated a Buy rating on United Therapeutics Corporation (NASDAQ:UTHR) on July 31, lowering the associated price target to $400 from $425.
The analyst based the optimistic rating on the company’s potential market opportunities and ongoing clinical trials.
He stated that the TETON trials are expected to provide notable data that may result in regulatory approval and subsequent market launch by 2027. The TETON trials are evaluating the use of nebulized Tyvaso for idiopathic pulmonary fibrosis (IPF).
Fein added that the trials are built on promising findings from the INCREASE trial, which exhibited significant improvements in lung function among IPF patients. Tyvaso also has the potential to address a considerable unmet need in the IPF market, supporting the optimistic outlook.
United Therapeutics Corporation (NASDAQ:UTHR) is a biotechnology company that develops and commercializes products for patients with chronic and life-threatening conditions. Its product portfolio includes Adcirca, Orenitram, Remodulin, TYVASO, and Unituxin.
9. Biogen Inc. (NASDAQ:BIIB)
Forward P/E: 8.05
Number of Hedge Fund Holders: 52
Biogen Inc. (NASDAQ:BIIB) is one of the top cheap pharmaceutical stocks to buy now. BofA lowered the firm’s price target on Biogen Inc. (NASDAQ:BIIB) to $142 from $143 on August 1, keeping a Neutral rating on the shares.
The firm told investors that Biogen Inc.’s (NASDAQ:BIIB) 2025 estimates are “slightly higher” after a “big beat and raise” in fiscal Q2 2025. However, it added that the company trimmed its price target, rolling its valuation to its 2026 EPS estimate.
BofA further stated that while Biogen Inc. (NASDAQ:BIIB) is “admittedly one of the cheaper names in large-cap biopharma,” the company is struggling to see a compelling “buy thesis” as the growth outlook over the next few years “remains lackluster.”
Biogen Inc. (NASDAQ:BIIB) is a global biopharmaceutical company that discovers, develops, and delivers advanced therapies for serious diseases worldwide.
Its medicine portfolio treats multiple sclerosis (MS), spinal muscular atrophy (SMA), Alzheimer’s disease, and amyotrophic lateral sclerosis (ALS).
8. Novo Nordisk A/S (NYSE:NVO)
Forward P/E: 12.29
Number of Hedge Fund Holders: 60
Novo Nordisk A/S (NYSE:NVO) is one of the top cheap pharmaceutical stocks to buy now. On August 1, Bernstein analyst Florent Cespedes maintained a Hold rating on Novo Nordisk A/S (NYSE:NVO) and set a price target of DKK620.00.
The rating came even after Novo Nordisk A/S (NYSE:NVO) announced sales and operating profit growth at constant exchange rates (CER) for the first six months of 2025 on July 29. The company also updated its full-year sales and operating profit outlook at CER.
Novo Nordisk A/S (NYSE:NVO) reported that sales grew 18% and operating profit rose by 29%, both at CER, in the first six months of 2025.
Management stated that gross-to-net sales adjustments related to prior years positively affected sales growth, as well as an adjustment related to the 340B provision of around DKK 3 billion in Q2 2025.
Operating profit growth was driven by the ocedurenone impairment in Q2 2025, partially offset by the effects associated with the acquisition of the three Catalent manufacturing sites.
Novo Nordisk A/S (NYSE:NVO) is a global healthcare company specializing in diabetes care. It develops, discovers, manufactures, and markets pharmaceutical products.
Its operations are divided into two business segments: biopharmaceuticals and diabetes and obesity care. The latter segment covers GLP-1, insulin, and other protein-related products.
7. Teva Pharmaceutical Industries Limited (NYSE:TEVA)
Forward P/E: 6.03
Number of Hedge Fund Holders: 64
Teva Pharmaceutical Industries Limited (NYSE:TEVA) is one of the top cheap pharmaceutical stocks to buy now. Leader Capital Markets analyst Sabina Levi maintained a Buy rating on Teva Pharmaceutical Industries Limited (NYSE:TEVA) on August 1, setting a price target of ILA9,300.00.
The rating update followed Teva Pharmaceutical Industries Limited’s (NYSE:TEVA) release of its fiscal Q2 2025 results on July 30. The company reported that it is on track for a 30% operating profit margin by 2027, in line with its Pivot to Growth Strategy.
Q2 2025 marked the 10th consecutive quarter of year-over-year revenue growth for Teva Pharmaceutical Industries Limited (NYSE:TEVA), with Q2 2025 revenue reaching $4.2 billion.
The company reported a GAAP diluted EPS of $0.24, while non-GAAP diluted EPS reached $0.66, reflecting a growth of $0.05 or 9% year-over-year. Free cash flow for the quarter also rose 47% year-over-year to $476 million.
Teva Pharmaceutical Industries Limited (NYSE:TEVA) develops, produces, and sells medicines. Its operations are divided into the US, Europe, and International Markets geographical segments.
Each business segment covers the entire product portfolio in that region, including specialty, generics, and over-the-counter (OTC) products.
6. Bristol-Myers Squibb Company (NYSE:BMY)
Forward P/E: 6.8
Number of Hedge Fund Holders: 69
Bristol-Myers Squibb Company (NYSE:BMY) is one of the top cheap pharmaceutical stocks to buy now. Morgan Stanley analyst Terence Flynn maintained a Sell rating on Bristol-Myers Squibb Company (NYSE:BMY) on August 1, keeping the associated price target at $34.00.
The analyst told investors that one of his primary concerns is the risk associated with the estimates for 2026 and beyond, as they appear overly optimistic.
He cited previous trial failures, reasoning that Bristol-Myers Squibb Company’s (NYSE:BMY) recent clinical trial site reviews may potentially result in a delay in data timelines, causing uncertainties about future trial success. This holds especially true for the Cobenfy ADEPT-2 Phase 3 trial.
Flynn added that Bristol-Myers Squibb Company’s (NYSE:BMY) revenue and earnings outlook for the coming years also warrants a cautious outlook. He expects the potential challenges stemming from patent expirations of mature products and the company’s new product portfolio to add to this cautious stance.
Bristol-Myers Squibb Company (NYSE:BMY) is a biopharmaceutical company that discovers, develops, and delivers advanced medicines for serious diseases. Its medicines fall into various therapeutic classes, including hematology, oncology, cardiovascular, immunology, and neuroscience.
5. Amgen Inc. (NASDAQ:AMGN)
Forward P/E: 14.14
Number of Hedge Fund Holders: 69
Amgen Inc. (NASDAQ:AMGN) is one of the top cheap pharmaceutical stocks to buy now. Leerink Partners analyst David Risinger maintained a neutral stance on Amgen Inc. (NASDAQ:AMGN) on July 23, giving the company a Hold rating without a price target.
The analyst based the rating on the company’s ongoing R&D initiatives, especially the rocatinlimab trials for atopic dermatitis.
He stated that while the initial results from the HORIZON trial were underwhelming with some safety concerns and modest efficacy, there is potential for improvement as detailed results from the IGNITE, SHUTTLE, and VOYAGER trials roll out in the second half of the year.
This could offer additional insight into the drug’s benefit-risk profile, according to the analyst.
Amgen Inc. (NASDAQ:AMGN) is a biotechnology company that discovers, develops, manufactures, and markets human therapeutics. It delivers new therapies for patients with complex cancers, especially in areas with significant unmet needs.
4. Gilead Sciences, Inc. (NASDAQ:GILD)
Forward P/E: 14.03
Number of Hedge Fund Holders: 79
Gilead Sciences, Inc. (NASDAQ:GILD) is one of the top cheap pharmaceutical stocks to buy now. Morgan Stanley analyst Terence Flynn maintained a bullish stance on Gilead Sciences, Inc. (NASDAQ:GILD) on July 28, giving the stock a Buy rating with a $135 price target.
The analyst told investors that Gilead Sciences, Inc.’s (NASDAQ:GILD) strategic positioning in the HIV prevention market warrants an optimistic outlook.
He considers the recent reaffirmation by the US Preventive Services Task Force (USPSTF) of its ‘A’ recommendation for HIV pre-exposure prophylaxis (PrEP) a significant factor, as it mandates a majority of insurers to cover PrEP without cost-sharing.
The endorsement includes Gilead Sciences, Inc.’s (NASDAQ:GILD) Descovy and the newly approved Yeztugo, which the analyst considers significant in expanding the company’s market share in the PrEP segment.
Flynn also anticipates Gilead Sciences, Inc.’s (NASDAQ:GILD) focus on the expansion of the overall market to be a significant growth driver, as the company’s guidance is to expand the number of PrEP users in the US to at least 600,000 by 2030, and over a million by the mid-2030s.
Gilead Sciences, Inc. (NASDAQ:GILD) is a biotech company that advances medicines to prevent and treat serious diseases such as cancer, immunodeficiency virus (HIV), viral hepatitis, and COVID-19.
Its portfolio of drugs focuses on medical areas with unmet needs and includes AmBisome, Atripla, Biktarvy, Cayston, Complera, and others. Gilead Sciences, Inc. (NASDAQ:GILD) operates in over 35 countries.
3. Johnson & Johnson (NYSE:JNJ)
Forward P/E: 15.18
Number of Hedge Fund Holders: 91
Johnson & Johnson (NYSE:JNJ) is one of the top cheap pharmaceutical stocks to buy now. On July 29, Johnson & Johnson (NYSE:JNJ) MedTech announced the launch of the VIRTUGUIDE™ System, an AI-powered, patient-matched solution that supports the Lapidus procedures.
The Lapidus procedures are a kind of bunion surgery that joins two bones near the arch of the foot (the first metatarsal bone and the medial cuneiform) to realign them.
The system employs pre-operative planning software to “assess each patient’s bunion and make personalized recommendations for the intended correction”. The software was developed in collaboration with PeekMed.
Management stated that bunions affect nearly one-third of adults in the US, ranking it among the most common foot problems. However, the traditional Lapidus surgery for its treatment is often challenging.
The VIRTUGUIDE™ AI Lapidus System addresses these challenges by reducing surgical complexity and offering a streamlined approach.
Johnson & Johnson (NYSE:JNJ) develops, manufactures, and sells products in the healthcare field. The company operates through two segments: Innovative Medicine and MedTech.
The MedTech segment includes an elaborate range of medical devices and products used in cardiovascular intervention, orthopedics, interventional solutions, surgery, and vision fields.
2. Merck & Co., Inc. (NYSE:MRK)
Forward P/E: 8.75
Number of Hedge Fund Holders: 93
Merck & Co., Inc. (NYSE:MRK) is one of the top cheap pharmaceutical stocks to buy now. Goldman Sachs analyst Asad Haider maintained a bullish stance on Merck & Co., Inc. (NYSE:MRK) on July 30, giving the stock a Buy rating and lowering the price target to $94 from $99.
The analyst told investors that despite complications in Merck & Co., Inc.’s (NYSE:MRK) recent financial updates, the company’s bottom line surpassed expectations.
While he acknowledged that the uncertainty regarding the Gardasil franchise, particularly in the US and China, has been a concern, the analyst also stated that Merck & Co., Inc.’s (NYSE:MRK) new product cycle, Winrevair, shows promising potential.
Management expressed optimism about the potential label expansion, and data from the HYPERION trial later this year further supports the positive outlook, according to the analyst.
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.
Its Pharmaceutical segment offers vaccines and human health pharmaceutical products, typically therapeutic and preventive agents. Its Animal Health segment develops, discovers, manufactures, and markets a range of vaccines and veterinary pharmaceutical products.
1. Pfizer Inc. (NYSE:PFE)
Forward P/E: 7.74
Number of Hedge Fund Holders: 99
Pfizer Inc. (NYSE:PFE) is one of the top cheap pharmaceutical stocks to buy now. On June 25, Pfizer Inc. (NYSE:PFE) announced that its board of directors approved a $0.43 Q3 2025 dividend on the company’s common stock, payable September 2, 2025, to holders of the Common Stock of record at the close of business on July 25, 2025. The Q3 2025 cash dividend marks Pfizer Inc.’s (NYSE:PFE) 347th consecutive quarterly dividend.
Pfizer Inc. (NYSE:PFE) reported in its fiscal Q1 2025 results that the first phase of its manufacturing optimization program is on track to deliver around $1.5 billion in net cost savings by the end of 2026, with initial savings expected in the second half of 2025.
Pfizer Inc. (NYSE:PFE) also reaffirmed all components of its full-year 2025 financial guidance. It expects revenues to be in the $61 billion to $64 billion range and adjusted diluted EPS in the $2.80 to $3.00 range.
Pfizer Inc. (NYSE:PFE) is a global biopharmaceutical company that manufactures, develops, markets, and sells biopharmaceutical products worldwide. It advances wellness, prevention, treatment, and cures in developing and emerging markets.
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