In this article, we discuss 14 best cancer stocks to buy.
The global oncology landscape continues to evolve, with ongoing efforts to discover, develop, and provide innovative treatments aimed at improving outcomes for a growing number of patients. However, the accessibility and utilization of these new cancer medications vary significantly worldwide. According to IQVIA, the number of oncology clinical trials initiated in 2022 remained high, marking a 22% increase since 2018. Over the past five years, there has been a consistent annual rise of 5% in the global population of patients receiving cancer treatment. Projections indicate that global spending on cancer drugs is set to reach $375 billion by 2027, a significant increase from $196 billion in 2022. The oncology portfolio is expanding rapidly, with more than 2,000 products currently in development. A substantial portion of these products, nearly 71%, is being developed by emerging biopharmaceutical companies. These companies have significantly increased their contributions to the development of cancer therapies, up from 51% in 2017. Globally, 237 new active substances have been introduced for cancer treatment over the past two decades, with almost 115 launched within the last five years. The United States has seen 78 NAS launches in the past five years and a total of 189 over the last two decades.
The steady rise in cancer treatment can be attributed to aging populations and improved access to healthcare services in developed markets. In lower-income markets, efforts to expand healthcare access and longer treatment durations have led to a higher number of patients receiving cancer treatment each year.
As per Fortune Business Insights’ findings, the global market for oncology drugs reached a value of $184.95 billion in 2022. Projections indicate significant growth, with the market expected to increase from $205.52 billion in 2023 to an estimated $484.32 billion by 2030, representing a compound annual growth rate of 13% during the forecast period. Oncology drugs include a wide range of treatments, including targeted therapies, chemotherapy agents, immunotherapies, and hormone therapies, all developed to combat cancer. Several factors contribute to the growth of this market, including the increasing prevalence of different types of cancer, the approval and launch of new drugs, and improved research efforts by pharmaceutical companies in the oncology field. For instance, as per data released by the American Cancer Society in January, 2023 will see a rise in cancer patients in the United States, with an anticipated 28% increase compared to 2010, resulting in approximately 1.96 million cancer cases by the end of 2023.
Faced with a severe shortage of over a dozen cancer medications, the US Food and Drug Administration is considering the temporary importation of chemotherapy drugs from international manufacturers not currently approved for distribution in the United States, an FDA spokesperson told CNBC. This potential move aims to address a pressing issue highlighted by medical professionals at hospitals across the country, particularly concerning two drugs – cisplatin and carboplatin, which play a critical role in cancer treatment and are widely utilized. The World Health Organization has recognized the significance of these drugs in basic healthcare. Shortages of these drugs have compelled hospitals to ration their supply by reducing doses and prioritizing patients who stand to gain the most from treatment. Dr. Abdul Rafeh Naqash, a doctor at the Stephenson Cancer Center at the University of Oklahoma, stated:
“The lawmakers in the country need to understand that this is a big problem at this point, where unless something changes in the next few weeks, this can lead to a big national emergency from a patient and health care standpoint.”
The shortages of cisplatin and carboplatin are the result of a temporary production halt for the U.S. market at an Intas Pharmaceuticals facility in India. Dr. Karen Knudsen, CEO of the American Cancer Society, pointed out that these shortages highlight a persistent economic issue in the generic drug market. She also noted that the demand for these drugs is expected to increase in the coming years due to an aging population, as older individuals face a higher risk of cancer.
In this article, we discuss some of the top cancer stocks to invest in, which include Pfizer Inc. (NYSE:PFE), Merck & Co., Inc. (NYSE:MRK), and Johnson & Johnson (NYSE:JNJ).
Our Methodology
We selected the following cancer stocks based on the hedge fund sentiment toward each stock. We have assessed the hedge fund sentiment from Insider Monkey’s database of 910 elite hedge funds tracked as of the end of the second quarter of 2023. The list is arranged in ascending order of the number of hedge fund investors in each firm.
Photo by National Cancer Institute on Unsplash
Best Cancer Stocks To Buy Now
14. Kura Oncology, Inc. (NASDAQ:KURA)
Number of Hedge Fund Holders: 29
Kura Oncology, Inc. (NASDAQ:KURA) is a clinical-stage biopharmaceutical firm based in San Diego, California. The company’s focus revolves around a range of small molecule product candidates designed to combat cancer. On August 11, BofA Securities started coverage of Kura Oncology, Inc. with a Buy rating. They expressed optimism about the stock, seeing it as undervalued considering the promising revenue prospects of its primary drug candidate, ziftomenib, currently in development for treating acute myeloid leukemia.
According to Insider Monkey’s second quarter database, 29 hedge funds were bullish on Kura Oncology, Inc.. This number increased from the previous quarter when 24 funds had invested in the stock. Aaron Cowen’s Suvretta Capital Management is the leading position holder in the company, with 7.03 million shares worth $74.36 million.
In addition to Pfizer Inc., Merck & Co., Inc., and Johnson & Johnson, Kura Oncology, Inc. is one of the best cancer stocks to buy.
13. Exelixis, Inc. (NASDAQ:EXEL)
Number of Hedge Fund Holders: 31
Exelixis, Inc. (NASDAQ:EXEL) is a biotechnology company with a primary focus on oncology. The company is dedicated to discovering, developing, and bringing new cancer treatments to the market in the United States. It is one of the best cancer stocks to buy. On September 26, H.C. Wainwright began coverage of Exelixis, Inc. with a Buy rating, highlighting the company’s strong portfolio of targeted oncology treatments. The firm has set a price target of $28 for the stock.
According to Insider Monkey’s second quarter database, 31 hedge funds were bullish on Exelixis, Inc., compared to 28 funds in the preceding quarter. Thomas Steyer’s Farallon Capital held the largest position in the company, with 25.86 million shares worth $494.2 million.
12. Guardant Health, Inc. (NASDAQ:GH)
Number of Hedge Fund Holders: 36
Guardant Health, Inc. (NASDAQ:GH), one of the best cancer stocks, is a precision oncology company offering blood tests, data analysis, and insights globally. The company has a research collaboration with the Parker Institute for Cancer Immunotherapy, focusing on understanding how molecular cancer biomarkers relate to patient responses to immunotherapy treatments across different cancer types. On August 3, Guardant Health, Inc. announced a Q2 non-GAAP EPS of -$0.82 and a revenue of $137.15 million, outperforming Wall Street estimates by $0.11 and $7.73 million, respectively.
According to Insider Monkey’s second quarter database, 36 hedge funds were bullish on Guardant Health, Inc., up from 27 funds in the previous quarter. Steve Cohen’s Point72 Asset Management held a significant position in the company, with 2.7 million shares valued at $97.17 million.
Here is what Aristotle Atlantic Partners has to say about Guardant Health, Inc. in its Q2 2023 investor letter:
“Guardant shares ended the quarter strong, recovering to some extent from the previous weakness in the quarter, as the company reported accelerating clinical volume growth and raised earnings guidance. In addition, the company announced additional U.S. commercial insurance coverage for their Guardant 360 test in the U.S. and government reimbursement in Japan. Lasty, the company completed a successful secondary offering, raising approximately $250 million.”
11. Moderna, Inc. (NASDAQ:MRNA)
Number of Hedge Fund Holders: 40
Ranked 11th on our list of the best cancer stocks, Moderna, Inc. (NASDAQ:MRNA) is a biotechnology company involved in the development and distribution of messenger RNA therapeutics and vaccines. The company focuses on treating immuno-oncology, infectious diseases, rare diseases, autoimmune conditions, and cardiovascular diseases across the United States, Europe, and other regions. Moderna, Inc.’s portfolio includes a range of therapeutic options, from systemic treatments to cancer vaccines, immuno-oncology products, and multiple therapeutics for different medical conditions.
On September 13, during its R&D Day event, Moderna, Inc. announced plans for its future growth. The company anticipates generating between $10 billion to $15 billion in annual sales five years after introducing new products in oncology, rare diseases, and latent diseases by 2028. To support this organic expansion, Moderna, Inc. also plans to invest approximately $25 billion in research and development between 2024 and 2028.
According to Insider Monkey’s second quarter database, 40 hedge funds were bullish on Moderna, Inc., same as the last quarter. Philippe Laffont’s Coatue Management held the largest position in the company, with 6.55 million shares worth $795.35 million.
Baron Health Care Fund made the following comment about Moderna, Inc. in its Q1 2023 investor letter:
“Moderna, Inc. is a leader in the emerging field of mRNA-based vaccines and therapeutics and was one of the three main producers of the COVID vaccine. Shares fell during the quarter. We believe as COVID shifts away from pandemic status and becomes an increasingly commercial market (rather than government funded), there is increasing investor uncertainty around what a booster market could look like, which is pressuring shares. Looking beyond COVID, we think Moderna has the potential to disrupt the biopharmaceutical industry, from infectious disease vaccines to oncology, and we remain shareholders.”
10. AstraZeneca PLC (NASDAQ:AZN)
Number of Hedge Fund Holders: 41
AstraZeneca PLC (NASDAQ:AZN), a biopharmaceutical company, engages in the research, development, manufacturing, and distribution of prescription medications. The company’s portfolio of marketed products includes medications such as Calquence, Enhertu, Faslodex, Imfinzi, Iressa, Koselugo, Lumoxiti, Lynparza, Orpathys, Tagrisso, and Zoladex for oncology. It is one of the best cancer stocks to buy. AstraZeneca PLC is also involved in the development of treatments for a range of conditions, including cardiovascular, renal, and metabolic diseases, respiratory and immunological disorders, rare diseases, influenza, and COVID-19. On August 9, AstraZeneca PLC declared a $0.93 per share interim dividend. The dividend was paid on September 11.
According to Insider Monkey’s second quarter database, 41 hedge funds were bullish on AstraZeneca PLC, compared to the last quarter when 39 funds had invested in the stock. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with 21.2 million shares valued at $1.52 billion.
Baron Health Care Fund made the following comment about AstraZeneca PLC in its Q1 2023 investor letter:
“We reduced our position in AstraZeneca PLC ahead of a clinical data read-out of a competitor drug that would compete with one of the company’s important drugs.”
9. Illumina, Inc. (NASDAQ:ILMN)
Number of Hedge Fund Holders: 43
Illumina, Inc. (NASDAQ:ILMN) is a company involved in the creation, production, and distribution of tools and systems used in the extensive examination of genetic differences and biological functions. It operates through two segments, Core Illumina and GRAIL. The company offers a multi-cancer early detection test called Galleri, in addition to a range of instruments and materials for sequencing and genetic analysis. On August 9, Illumina, Inc. announced results for the second quarter of 2023. The company reported a non-GAAP EPS of $0.32 and a revenue of $1.18 billion, exceeding estimates by $0.30 and $11.11 million, respectively.
According to Insider Monkey’s second quarter database, 43 hedge funds were bullish on Illumina, Inc.. 44 funds had invested in the stock during the prior quarter. Select Equity Group is the largest position holder in the company, with 1.5 million shares worth $280 million.
RiverPark Large Growth Fund made the following comment about Illumina, Inc. in its Q2 2023 investor letter:
“Illumina, Inc.: Illumina was our top detractor in the quarter despite reporting first quarter results that were generally in line with expectations and reaffirming full-year guidance. Uncertainty around activist investor Carl Icahn’s impact on the business, the change of CEO and the possible forced divestiture of liquid biopsy subsidiary Grail (early-stage cancer screening via blood samples) all weighed on Illumina’s stock price.
We continue to view the company’s core genomics industry as offering one of the larger total addressable markets that we cover, and ILMN is the clear innovation leader in sequencing and array-based solutions for genetic analysis. With less than 0.02% of humans having been sequenced and 99% of the variants discovered in the genome having not yet been deciphered, Illumina, at less than $5 billion of TTM revenue, is still in its infancy in what is potentially a greater than $50 billion genetics analysis tools market opportunity. We believe Carl Icahn’s involvement is neutral to slightly positive to the extent he can help the company be more disciplined on expenses. We are cautiously optimistic that EU regulators’ push to force Illumina to divest Grail will lead to either or both 1) much higher core earnings or 2) a big valuation for Grail in a sale. We added to our ILMN position during the quarter; it is a core holding.”
8. Jazz Pharmaceuticals plc (NASDAQ:JAZZ)
Number of Hedge Fund Holders: 44
Next on our list of the best cancer stocks is Jazz Pharmaceuticals plc (NASDAQ:JAZZ), which is a biopharmaceutical firm engaged in the discovery, advancement, and distribution of pharmaceutical products to address unmet medical demands worldwide. The company’s product portfolio is primarily focused on two areas – oncology, covering hematologic and solid tumors; and neuroscience, which includes sleep medicine and movement disorders. On August 9, Jazz Pharmaceuticals plc (NASDAQ:JAZZ) reported a Q2 non-GAAP EPS of $4.51 and a revenue of $957.32 million, outperforming Street consensus by $0.08 and $15.16 million, respectively.
According to Insider Monkey’s second quarter database, 44 hedge funds were bullish on Jazz Pharmaceuticals plc (NASDAQ:JAZZ), up from 40 funds in the last quarter. Robert Pohly’s Samlyn Capital held the largest position in the company, with 1.35 million shares worth $166.9 million.
7. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
Number of Hedge Fund Holders: 56
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is one of the best cancer stocks. It is a global biopharmaceutical company dedicated to the discovery, innovation, development, manufacturing, and distribution of medications designed to combat a range of diseases. The company’s product portfolio includes ZALTRAP, an intravenous infusion for metastatic colorectal cancer, and it is working on developing new treatments for different medical conditions, including cancer, hematologic disorders, eye disorders, allergies, inflammation, cardiovascular ailments, infectious diseases, rare disorders, and pain management, among others. On August 3, Regeneron Pharmaceuticals, Inc. announced a Q2 non-GAAP EPS of $10.24 and a revenue of $3.16 billion, outperforming market estimates by $0.34 and $140 million, respectively.
According to Insider Monkey’s second quarter database, 56 hedge funds were bullish on Regeneron Pharmaceuticals, Inc., compared to 54 funds in the prior quarter. John Overdeck and David Siegel’s Two Sigma Advisors is a significant stakeholder of the company, with a position comprising 299,300 shares worth $215.06 million.
Bronte Capital made the following comment about Regeneron Pharmaceuticals, Inc. in its Q3 2022 investor letter:
“There have been some bright spots in our long book. Regeneron Pharmaceuticals, Inc., a major position and a stock we wrote up in our June 2021 letter, has been one of the best performing stocks in the S&P 500 this year. Alas it has not been enough to offset some of our weaker stocks, let alone our overweight exposure to the UK (and Europe) which have suffered from both stock and currency weakness. We do not think we are bad at picking stocks on the long side and hope – reasonably we think – for better relative results in the future. Prior to COVID, our longs were markedly better than the index. Unfortunately, if you look at our long book this quarter and since the onset of the COVID pandemic, there is scant evidence that we have added any value by picking stocks to go long.”
6. Amgen Inc. (NASDAQ:AMGN)
Number of Hedge Fund Holders: 57
Amgen Inc. (NASDAQ:AMGN) is a global biopharmaceutical company involved in the research, development, manufacturing, and distribution of human therapeutics. The company mainly focuses on oncology/hematology, inflammation, bone health, cardiovascular diseases, nephrology, and neuroscience. Amgen Inc. primarily serves healthcare providers, which include physicians, clinics, dialysis centers, hospitals, and pharmacies. The products are distributed through pharmaceutical wholesale distributors and direct-to-consumer channels. On September 1, Horizon Therapeutics Public Limited Company (HZNP) saw a 3% increase in premarket trading following the settlement between Amgen Inc. and the Federal Trade Commission concerning Amgen’s proposed $28 billion acquisition of Horizon Therapeutics Public Limited Company (HZNP).
According to Insider Monkey’s second quarter database, 57 hedge funds were bullish on Amgen Inc., same as the preceding quarter. John Overdeck and David Siegel’s Two Sigma Advisors is the largest stakeholder of the company, with 1.6 million shares valued at $355.9 million.
Like Pfizer Inc., Merck & Co., Inc., and Johnson & Johnson, Amgen Inc. is one of the best cancer stocks to buy.
ClearBridge Large Cap Value Strategy made the following comment about Amgen Inc. in its Q2 2023 investor letter:
“In health care we exited global biotechnology company Amgen Inc.. Similar to many of its large cap pharma/biotech peers, Amgen is facing patent cliffs for its major drugs in the second half of the decade, while the company’s pipeline has disappointed. In addition, Amgen is facing above-average pricing pressure impacting a number of its current products that compete in crowded therapeutic areas. Amgen is now relying more heavily on acquisitions to address its patent cliff and weak internal pipeline. However, Amgen’s recently proposed $28 billion acquisition of Horizon Therapeutics is being challenged by the FTC, creating further uncertainty.”
5. Bristol-Myers Squibb Company (NYSE:BMY)
Number of Hedge Fund Holders: 66
Bristol-Myers Squibb Company (NYSE:BMY) is one of the best cancer stocks to buy. It is a global biopharmaceutical company engaged in the research, development, licensing, manufacturing, marketing, and distribution of biopharmaceutical products. These products are focused on addressing different medical conditions, including hematology, oncology, cardiovascular, immunology, fibrotic, and neuroscience diseases. On September 20, Bristol-Myers Squibb Company declared a $0.57 per share quarterly dividend, in-line with previous. The dividend is to be paid on November 1, to shareholders of record as of October 6.
According to Insider Monkey’s second quarter database, 66 hedge funds were bullish on Bristol-Myers Squibb Company, in contrast to the last quarter when 69 funds had invested in the stock. Richard S. Pzena’s Pzena Investment Management is the leading position holder in the company, with 4.33 million shares worth $276.75 million.
RGA Investment Advisors made the following comment about Bristol-Myers Squibb Company in its Q3 2022 investor letter:
“Bristol-Myers Squibb Company, which we referenced above, boasts a double digit free cash flow yield that gets divided roughly equally between repurchases, a dividend and M&A in what is the best environment for acquisitions perhaps ever. In 2019, BMY acquired Celgene, who had one of the better corporate development programs in the industry. We view this as a great outlet for us as generalists considering a company like BMY should truly thrive with the ability to acquire outstanding assets and science at depressed valuations. We touched on the Turning Point acquisition above and we expect the company to be increasingly active in the M&A landscape. Importantly, Celgene also came to BMY with a phenomenal CAR-T platform. CAR-T is a cell therapy that activates the body’s immune system to target cancers. This will be a key growth vector alongside M&A in overcoming the company’s patent cliff.”
4. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 73
Pfizer Inc. is a global biopharmaceutical company that is involved in the discovery, development, manufacturing, marketing, and distribution of biopharmaceutical products. The company is notable for its strong oncology portfolio, which comprises over 20 approved medications and ongoing clinical trials, making it one of the best cancer stocks to buy. On September 15, it was revealed that Pfizer Inc.’s proposed $43 billion purchase of oncology-focused pharmaceutical company Seagen Inc. (NASDAQ:SGEN) will undergo a review by European Union antitrust authorities. The European Commission has set a deadline of October 19 to conclude its initial assessment.
According to Insider Monkey’s second quarter database, 73 hedge funds were bullish on Pfizer Inc., same as the prior quarter. Ric Dillon’s Diamond Hill Capital held a significant position in the company, with 6.9 million shares worth $253.1 million.
Diamond Hill Large Cap Strategy made the following comment about Pfizer Inc. in its Q2 2023 investor letter:
“Our bottom contributors in Q2 included health insurance company Humana, biopharmaceutical company Pfizer Inc. and global entertainment company Disney. Pharmaceutical giant Pfizer has been dealing with a decline in sales due to lower COVID vaccination levels. Additionally, in 2023, management is increasing spend as the company invests in new product launches. That said, we remain positive about the long-term company fundamentals.”
3. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 74
Ranked third on our list of the best cancer stocks, AbbVie Inc. (NYSE:ABBV) is a global pharmaceutical company engaged in the research, development, manufacturing, and distribution of pharmaceuticals. Its product portfolio includes Imbruvica, used in the treatment of blood cancers in adults; Venclexta/Venclyxto for the management of hematological malignancies; and Lupron, utilized in the treatment of advanced prostate cancer, endometriosis, central precocious puberty, as well as other pharmaceutical products for different medical conditions. On September 8, AbbVie Inc. declared a $1.48 per share quarterly dividend, in-line with previous. It is to be paid on November 15 to shareholders of record as of October 13.
According to Insider Monkey’s second quarter database, 74 hedge funds were bullish on AbbVie Inc., compared to 75 in the preceding quarter. Ken Griffin’s Citadel Investment Group is a significant position holder in the company, with over 1.9 million shares worth $260.17 million.
Diamond Hill Large Cap Strategy made the following comment about AbbVie Inc. in its Q2 2023 investor letter:
“Also among our bottom contributors were AbbVie and Truist Financial Corp. Pharmaceutical company AbbVie Inc.’s stock declined in the quarter due to biosimilar competition against its largest drug, Humira. We believe management is successfully navigating biosimilars, as this has been a known generic entry for years. We still believe the company has attractive long-term prospects despite this near-term headwind.”
2. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 78
Merck & Co., Inc. is a global healthcare company with two primary segments – Pharmaceutical and Animal Health. Within the Pharmaceutical segment, the company provides a range of human health pharmaceutical products covering oncology, hospital acute care, immunology, neuroscience, virology, cardiovascular, diabetes, and vaccines. Merck & Co., Inc. is one of the top cancer stocks. On September 22, Merck & Co., Inc. reported successful results in a Phase 3 clinical trial for its anti-PD-1 therapy Keytruda when used in combination with Seagen Inc.’s antibody-drug conjugate Padcev. This combination treatment demonstrated positive outcomes for patients with bladder cancer.
According to Insider Monkey’s second quarter database, 78 hedge funds were bullish on Merck & Co., Inc., an increase from 75 funds in the last quarter. Cliff Asness’ AQR Capital Management held the largest position in the company, with approximately 2.91 million shares valued at $331.84 million.
Carillon Eagle Growth & Income Fund made the following comment about Merck & Co., Inc. in its Q2 2023 investor letter:
“Merck & Co., Inc. presented positive clinical data for a new drug in its oncology pipeline, announced an acquisition that was viewed favorably by investors, and reported strong first-quarter financial results while also increasing its earnings guidance for 2023.”
1. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 88
Johnson & Johnson conducts research, development, manufacturing, and distribution of healthcare products worldwide. The company’s Pharmaceutical segment offers products for different medical conditions, including prostate cancer, hematologic malignancies, lung cancer, and bladder cancer, autoimmune diseases, infectious diseases, mental health disorders, as well as treatments for thrombosis, diabetes, macular degeneration, and pulmonary arterial hypertension. On September 6, Johnson & Johnson’s Janssen division reported that its bispecific antibody Rybrevant successfully achieved the dual primary objective of extending progression-free survival in a Phase 3 clinical trial involving lung cancer patients with particular genetic mutations.
According to Insider Monkey’s second quarter database, 88 hedge funds were bullish on Johnson & Johnson, up from 86 funds in the preceding quarter. Ray Dalio’s Bridgewater Associates held a significant position in the company, with 3.18 million shares valued at $526.59 million.
ClearBridge Large Cap Value Strategy made the following comment about Johnson & Johnson in its first quarter 2023 investor letter:
“The tech-dominated quarter was a headwind for both defensive and cyclical sectors, with shares of health care holdings such as UnitedHealth Group (UNH), Elevance (ELV) and Johnson & Johnson declining after a strong 2022.”
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This article is originally published at Insider Monkey.
