In this article, we will take a detailed look at Insiders are Piling into These 10 Healthcare Stocks in 2024. For a quick overview of such stocks, read our article Insiders are Piling into These 5 Healthcare Stocks in 2024.
Healthcare investors were nervous when 2024 started, since election years usually don’t bode well for healthcare stocks. But on the back of several growth catalysts, healthcare stocks have fared well so far in the year. As of March, the S&P 500 Healthcare had gained about 7.1% in the year, which was the best start since 2017, according to Dow Jones Market Data. While the sector has pared some of those gains since, it’s still up 4.1% year to date through April 9 as GLP-1 drugs for weight loss and diabetes continue to make headlines with new breakthrough results and developments.
Effect of GLP-1 Drugs on Healthcare Sector Gains
Major healthcare companies like Eli Lilly And Co (NYSE:LLY), Novo Nordisk A/S (NYSE:NVO) and Amgen Inc (NASDAQ:AMGN), among many others, are continuing to spend a fortune in the weight loss industry. Eli Lilly recently started developing its $2.5 billion manufacturing plant in Germany to ramp up production of its blockbuster weight loss therapy, tirzepatide. The FDA recently confirmed that tirzepatide will remain in short supply until the end of April amid huge demand.
Major healthcare companies like Pfizer, which has so far lagged behind in the race of obesity drugs, are also expected to come up with new therapies. This is because the weight loss market is huge. A report by IQVIA, which provides advanced analytics and tech solutions for the healthcare industry, said that obesity was expected to rise to 25% of the world’s total population by 2035, up from 14% in 2020.
The massive increase in obesity could leave a $4 trillion impact on the world economy in 2035 driven by lost productivity and higher healthcare costs. In this backdrop, the report said that the launch of obesity drugs marks an “inflection point” in the healthcare industry. Talking about Wegovy, sold by Novo Nordisk, the report said:
“The arrival of the GLP-1 receptor agonists, especially Wegovy, marked an inflection point for the obesity market, because for the first time pharmacological interventions delivered meaningful weight loss of 10-15%. Global obesity spending reached nearly $24bn in 2023, an over sevenfold growth in value in just three years, driven by the advent of new agents, and from 2024 onwards the market is forecasted to accelerate rapidly, with a possible 24-27% CAGR to 2028, and a potential value of up to $131bn by 2028, according to the IQVIA Institute’s Global Use of Medicines 2024 report.”
A look at Novo Nordisk’s earnings call in February shows how weight loss drugs are adding to the company’s revenues. The company talked about Wegovy’s sales in several countries:
“Obesity care sales grew 154%. In International operations, sales grew 47%, driven by both Saxenda and Wegovy. Sales of Saxenda increased by 14% and sales of Wegovy reached around DKK 2 billion. Going forward, we continue to roll out Wegovy in a sustainable manner by volume cap launches to balance supply and demand.
In North America operations, obesity care sales grew 212%. Total rare disease sales decreased by 15%, which was driven by a 24% decrease in International operations and by 1% decrease in North America operations, following a reduction in supply of Norditropin. Please turn to the next slide. With 29% sales growth in Diabetes Care, we are growing faster than the total diabetes market. As a result, our global diabetes value market share increased to 33.8%, which is above our strategic aspiration of reaching one-third of the global diabetes value market. This increase reflects market share gains in both North America operations and International operations. Please turn to the next slide. In International operations, total diabetes care sales increased by 20% in 2023, which was primarily driven by GLP-1 sales growing 53%.
Novo Nordisk is the market leader in international operations with the GLP-1 value market share over 70%. Ozempic continues its GLP-1 market leadership with 47.5% market share. Rybelsus has just shy of 14% value market share driven by solid uptick across geographies.”
Read the full earnings call transcript here.
Photo by AlphaTradeZone
Growth Catalysts for Healthcare Stocks Beyond Weight Loss Drugs
Moving beyond the weight loss drugs boom, are there any secular growth trends that could urge investors to buy healthcare stocks in 2024 or 2025? After all healthcare stocks saw great returns from 2013 until the COVID-driven peak but started to decline amid rising interest rates and inflationary effects. Analysts believe rising healthcare costs, an ageing population and demand of new medicines could boost healthcare stocks for several years to come. A report by Lord Abbett shared some data compiled by the Centers for Medicare and Medicaid Services which says that healthcare spending relative to GDP in the US could reach 20% by 2028.
“One of the drivers for the increase in spend on healthcare is the shift in demographics. In the U.S., as the baby boomer cohort ages, we continue to see a decade-over-decade shift in the population, where a larger percentage of the population is 60 years old or older. T portion of the population above 60 years old has increased significantly in the U.S. over the last twenty years.”
Methodology
In this backdrop, it’s interesting to see which healthcare stocks insiders are buying. For this article we used Insider Monkey’s insider trading stock screener and listed down healthcare stocks that saw insider buying recently. Why is it important to keep tabs on insider buying activity? Research has shown that incorporating insider sentiment in your investing strategy helps beat the market. Insider Monkey’s monthly newsletter and portfolio that focuses on activist hedge funds, insider trading and stock picks from hedge fund investor newsletters and conferences returned 199.2% between March 2017 and March 12, 2024 and outperformed the S&P 500 ETFs’ 144.9% gain by more than 54 percentage points.
10. Alto Neuroscience Inc (NYSE:ANRO)
Number of Hedge Fund Investors: N/A
Alto Neuroscience Inc (NYSE:ANRO) is one of the healthcare stocks that recently saw insider buying. On March 28, 2024, Alto Neuroscience Inc’s (NYSE:ANRO) CFO Nicholas Conrad Smith snapped up 6150 shares of Alto Neuroscience Inc (NYSE:ANRO) at $16.36 per share. The total dollar worth of this transaction was $26,866. Since this transaction the stock is down 7%.
9. CalciMedica Inc (NASDAQ:CALC)
Number of Hedge Fund Investors: 1
CalciMedica Inc (NASDAQ:CALC) is working on CRAC channel inhibitors to treat inflammatory diseases affecting kidneys, lungs and pancreas. CalciMedica Inc’s (NASDAQ:CALC) Chief Business Officer Eric W. Roberts on April 1 bought 4,000 shares of CalciMedica Inc (NASDAQ:CALC) at $3.90 per share. Since April 1 the stock has gained about 3.5%.
8. Greenwich LifeSciences Inc (NASDAQ:GLSI)
Number of Hedge Fund Investors: 3
Texas-based Greenwich LifeSciences Inc (NASDAQ:GLSI) ranks eighth in our list of the healthcare stocks with latest insider purchases. Greenwich LifeSciences Inc’s (NASDAQ:GLSI) CEO and CFO Snehal S. Patel on March 5 bought 30,500 shares of Greenwich LifeSciences Inc (NASDAQ:GLSI) at $12.49 per share. The total value of this transaction was $380,945. Since then the stock is up 28%.
Unlike Eli Lilly And Co (NYSE:LLY), Novo Nordisk A/S (NYSE:NVO) and Amgen Inc (NASDAQ:AMGN), which are highly popular among hedge funds, GLSI is owned by just three hedge funds.
7. Outlook Therapeutics Inc (NASDAQ:OTLK)
Number of Hedge Fund Investors: 4
Outlook Therapeutics Inc (NASDAQ:OTLK) ranks seventh in our list of the healthcare stocks with latest insider purchases. Outlook Therapeutics Inc’s (NASDAQ:OTLK) Chief Commercial Officer Jeff Evanson on March 7 bought 62,484 shares of Outlook Therapeutics Inc (NASDAQ:OTLK) at $0.42 per share. Since this transaction the stock is up 10%.
6. Gain Therapeutics Inc (NASDAQ:GANX)
Number of Hedge Fund Investors: 5
On March 28, 2024, Jeffrey Scott Riley, a director at Gain Therapeutics Inc (NASDAQ:GANX), bought 30,000 shares of Gain Therapeutics Inc (NASDAQ:GANX) at $3.86 per share. Since then the stock is up 5.8%.
Out of the 933 hedge funds tracked by Insider Monkey, five hedge funds reported owning stakes in Gain Therapeutics Inc (NASDAQ:GANX). Gain Therapeutics Inc (NASDAQ:GANX) makes small molecules treatments for several diseases including Parkinson’s disease and other neurodegenerative diseases. In addition to GANX, major companies like Eli Lilly And Co (NYSE:LLY), Novo Nordisk A/S (NYSE:NVO) and Amgen Inc (NASDAQ:AMGN) are also seeing interest from hedge funds.
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Disclosure. None. Insiders are Piling into These 10 Healthcare Stocks in 2024 was initially published on Insider Monkey.
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