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Boost Your Portfolio's Health With These 4 Large-Cap Drug Stocks
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Large drug-maker stocks have witnessed a strong run this year, driven by positive pipeline news and regulatory approvals. The FDA has granted approval to 29 novel drugs this year. Innovation in the industry is at its peak, with spaces like weight loss/obesity, inflammation and Alzheimer’s disease attracting investor interest in 2024.
Novel diabetes and obesity drugs of Eli Lilly (LLY - Free Report) and Novo Nordisk have taken the pharma sector by storm with both Eli Lilly’s tirzepatide drugs (Mounjaro and Zepbound) and Novo Nordisk’s semaglutide drugs (Ozempic, Ozempic and Wegovy) generating exceptional sales. Last year, the FDA approved Biogen and Eisai’s Leqembi (lecanemab-irmb) for the treatment of Alzheimer's disease. In 2024, Eli Lilly won the FDA approval for Kisunla (donanemab) to treat Alzheimer's disease.
Despite increased scrutiny on mergers and acquisitions (M&A) from the Federal Trade Commission, M&A activities remained strong.
Large drug-makers have several robust revenue streams and are mostly profitable companies, making them safe havens for investments.
As you can see in the charts below, the Large Cap Pharmaceuticals industry has risen 24.2% this year.
Our Choices
Here, we have discussed four large-cap drug and biotech companies — Eli Lilly, Roche (RHHBY - Free Report) , Novartis (NVS - Free Report) and Pfizer (PFE - Free Report) — which you should add to your portfolio for significant long-term gains. Eli Lilly and Roche currently sport a Zacks Rank #1 (Strong Buy), and Novartis and Pfizer carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Eli Lilly
Eli Lilly has seen unparalleled success with Mounjaro and Zepbound, which include the same compound tirzepatide, a dual GIP and GLP-1 receptor agonist (GIP/GLP-1 RA).
Despite a short time on the market, Mounjaro and Zepbound have become key top-line drivers for Eli Lilly in 2024, with demand rising rapidly. Eli Lilly has been investing heavily to address the supply constraints related to these drugs. Mounjaro and Zepbound generated sales of $6.7 billion in the first half of 2024, accounting for around 44% of the company’s total revenues. Label expansion of tirzepatide in other disease areas and its launch in additional geographies can boost sales.
Beside Mounjaro and Zepbound, Eli Lilly has received approvals for some drugs in the past year. These included Omvoh for ulcerative colitis, and BTK inhibitor Jaypirca for mantle cell lymphoma and chronic lymphocytic leukemia. Eli Lilly expects its new drugs — Mounjaro, Omvoh, Zepbound, Ebglyss and Jaypirca — to drive significant growth in the foreseeable future, thus generating lucrative returns for its investors.
The stock has risen 58% so far this year compared with an increase of 24.2% for the industry.
Image Source: Zacks Investment Research
The FDA approval of the Alzheimer’s drug Kisunla (donanemab) in July was also a big win for the company. Eli Lilly believes Kisunla can generate blockbuster sales.
Earnings estimates for 2024 have risen from $13.61 to $16.49 per share for the company over the past 60 days. For 2025, earnings estimates have increased from $19.42 to $23.97 per share over the same timeframe.
Image Source: Zacks Investment Research
Roche
The company dominates the breast cancer space with a strong demand for its HER2 franchise drugs.
Roche’s portfolio of lung cancer drugs like Alecensa, Rozlytrek and Gavreto are witnessing strong uptake, thereby contributing to the top line. In the hematology portfolio, drugs like Tecentriq, Gazyva and Venclexta are going strong. The newly approved lymphoma drug Polivy has further bolstered this portfolio and is gaining traction quickly.
In the immunology portfolio, Roche is seeing an impressive performance of its multiple sclerosis drug Ocrevus, spinal muscular atrophy Evrysdi and eye disease drug Vabysmo. Sales of these drugs are expected to further induce growth for the company in the future.
Year to date, the stock has gained 3% compared with the industry’s 24.2% rise.
Image Source: Zacks Investment Research
Apart from sales of marketed drugs, the demand for Roche’s innovative diagnostic solutions for the early detection and treatment of diseases is also contributing significantly to the company’s revenues. Roche’s efforts to diversify its business through acquisitions are also encouraging. RHHBY also forayed into the lucrative obesity market through the acquisition of Carmot Therapeutics, which added CT-388, a dual GIP/GLP-1 RA currently being developed for obesity.
Roche’s earnings estimates for 2024 have risen from $2.44 to $2.68 per share over the past 60 days. For 2025, earnings estimates have risen from $2.64 to $2.87 per share over the same timeframe.
Image Source: Zacks Investment Research
Novartis
Kisqali (breast cancer) is one of the top growth drivers for the company, significantly boosting the oncology portfolio. The label expansion of the Kisqali, Tafinlar and Mekinist combination should drive sales. The drug is expected to have a multi-billion-dollar potential in the breast cancer market. Novartis has bolstered its foothold in the oncology space with the approvals of certain newer drugs, like Piqray (breast cancer), Tabrecta (lung cancer), Scemblix (chronic myeloid leukemia) and Pluvicto (prostate cancer). These drugs have put up a stellar performance, setting the momentum for the coming years.
Approval of new drugs and the label expansion of existing drugs will boost the top line. Heart failure drug Entresto and psoriasis drug Cosentyx have also significantly propelled sales. Label expansion of Entresto for hypertension and heart failure, and that of Cosentyx for the indication of hidradenitis suppurativa should continue to boost sales in the quarters ahead.
Other approved drugs like Kesimpta (multiple sclerosis) and Leqvio (heart and cholesterol disease) are also contributing to the top line and have further diversified Novartis’ area of operations. The recent spate of acquisitions, especially the acquisition of Germany-based MorphoSys AG, has also strengthened the company’s oncology pipeline and should diversify its portfolio further. The spin-off of the Sandoz business is allowing Novartis to focus on its core therapeutic areas.
The stock has gained 14.2% so far in 2024 compared with the industry’s rise of 24.2%.
Image Source: Zacks Investment Research
In the past 60 days, Novartis’ earnings estimates for 2024 have risen from $7.31 to $7.50 per share. In the same time frame, the company’s earnings estimates for 2025 have risen from $8.21 to $8.29 per share.
Image Source: Zacks Investment Research
Pfizer
Pfizer is one of the largest and most successful drug-makers in the field of oncology, comprising more than 26% of its total revenues. The company’s position in oncology was strengthened with the addition of Seagen in December 2023. Key drugs like Xtandi, Lorbrena, the Braftovi-Mektovi combination and Seagen’s cancer drugs are significantly boosting Pfizer’s sales in this segment. PFE has also ventured into the oncology biosimilars space and markets six biosimilars for cancer. Pfizer advanced its oncology clinical pipeline in 2024, with several candidates entering late-stage development. By 2030, the company expects to have eight or more blockbuster oncology medicines in its portfolio.
Though Pfizer’s COVID revenues are declining, its non-COVID operational revenues improved in the first half of 2024, driven by its key products like Prevnar, Vyndaqel and Eliquis; new launches like Abrysvo, Velsipity and Penbraya; newly acquired products like Nurtec; and those acquired from Seagen (December 2023). The trend is expected to continue in the second half. PFE’s new products/late-stage pipeline candidates, coupled with newly acquired products, including those acquired from Seagen, position it strongly for operational growth in 2025 and beyond. Pfizer expects 2025-2030 revenue CAGR to be 6%.
Huge profits from its COVID products strengthened its cash position. The funds are being used to make acquisitions, increase dividends, buy back shares and reduce debt. Continued growth in non-COVID sales and significant cost-reducing measures should drive profit growth.
Year to date, PFE shares have gained 3% compared with the industry’s growth of 24.2%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Pfizer’s earnings has risen from $2.38 to $2.62 per share for 2024 over the past 60 days, whereas that for 2025 has increased from $2.75 per share to $2.85 per share.
Image Source: Zacks Investment Research
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Boost Your Portfolio's Health With These 4 Large-Cap Drug Stocks
Large drug-maker stocks have witnessed a strong run this year, driven by positive pipeline news and regulatory approvals. The FDA has granted approval to 29 novel drugs this year. Innovation in the industry is at its peak, with spaces like weight loss/obesity, inflammation and Alzheimer’s disease attracting investor interest in 2024.
Novel diabetes and obesity drugs of Eli Lilly (LLY - Free Report) and Novo Nordisk have taken the pharma sector by storm with both Eli Lilly’s tirzepatide drugs (Mounjaro and Zepbound) and Novo Nordisk’s semaglutide drugs (Ozempic, Ozempic and Wegovy) generating exceptional sales. Last year, the FDA approved Biogen and Eisai’s Leqembi (lecanemab-irmb) for the treatment of Alzheimer's disease. In 2024, Eli Lilly won the FDA approval for Kisunla (donanemab) to treat Alzheimer's disease.
Despite increased scrutiny on mergers and acquisitions (M&A) from the Federal Trade Commission, M&A activities remained strong.
Large drug-makers have several robust revenue streams and are mostly profitable companies, making them safe havens for investments.
As you can see in the charts below, the Large Cap Pharmaceuticals industry has risen 24.2% this year.
Our Choices
Here, we have discussed four large-cap drug and biotech companies — Eli Lilly, Roche (RHHBY - Free Report) , Novartis (NVS - Free Report) and Pfizer (PFE - Free Report) — which you should add to your portfolio for significant long-term gains. Eli Lilly and Roche currently sport a Zacks Rank #1 (Strong Buy), and Novartis and Pfizer carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Eli Lilly
Eli Lilly has seen unparalleled success with Mounjaro and Zepbound, which include the same compound tirzepatide, a dual GIP and GLP-1 receptor agonist (GIP/GLP-1 RA).
Despite a short time on the market, Mounjaro and Zepbound have become key top-line drivers for Eli Lilly in 2024, with demand rising rapidly. Eli Lilly has been investing heavily to address the supply constraints related to these drugs. Mounjaro and Zepbound generated sales of $6.7 billion in the first half of 2024, accounting for around 44% of the company’s total revenues. Label expansion of tirzepatide in other disease areas and its launch in additional geographies can boost sales.
Beside Mounjaro and Zepbound, Eli Lilly has received approvals for some drugs in the past year. These included Omvoh for ulcerative colitis, and BTK inhibitor Jaypirca for mantle cell lymphoma and chronic lymphocytic leukemia. Eli Lilly expects its new drugs — Mounjaro, Omvoh, Zepbound, Ebglyss and Jaypirca — to drive significant growth in the foreseeable future, thus generating lucrative returns for its investors.
The stock has risen 58% so far this year compared with an increase of 24.2% for the industry.
The FDA approval of the Alzheimer’s drug Kisunla (donanemab) in July was also a big win for the company. Eli Lilly believes Kisunla can generate blockbuster sales.
Earnings estimates for 2024 have risen from $13.61 to $16.49 per share for the company over the past 60 days. For 2025, earnings estimates have increased from $19.42 to $23.97 per share over the same timeframe.
Roche
The company dominates the breast cancer space with a strong demand for its HER2 franchise drugs.
Roche’s portfolio of lung cancer drugs like Alecensa, Rozlytrek and Gavreto are witnessing strong uptake, thereby contributing to the top line. In the hematology portfolio, drugs like Tecentriq, Gazyva and Venclexta are going strong. The newly approved lymphoma drug Polivy has further bolstered this portfolio and is gaining traction quickly.
In the immunology portfolio, Roche is seeing an impressive performance of its multiple sclerosis drug Ocrevus, spinal muscular atrophy Evrysdi and eye disease drug Vabysmo. Sales of these drugs are expected to further induce growth for the company in the future.
Year to date, the stock has gained 3% compared with the industry’s 24.2% rise.
Apart from sales of marketed drugs, the demand for Roche’s innovative diagnostic solutions for the early detection and treatment of diseases is also contributing significantly to the company’s revenues. Roche’s efforts to diversify its business through acquisitions are also encouraging. RHHBY also forayed into the lucrative obesity market through the acquisition of Carmot Therapeutics, which added CT-388, a dual GIP/GLP-1 RA currently being developed for obesity.
Roche’s earnings estimates for 2024 have risen from $2.44 to $2.68 per share over the past 60 days. For 2025, earnings estimates have risen from $2.64 to $2.87 per share over the same timeframe.
Novartis
Kisqali (breast cancer) is one of the top growth drivers for the company, significantly boosting the oncology portfolio. The label expansion of the Kisqali, Tafinlar and Mekinist combination should drive sales. The drug is expected to have a multi-billion-dollar potential in the breast cancer market. Novartis has bolstered its foothold in the oncology space with the approvals of certain newer drugs, like Piqray (breast cancer), Tabrecta (lung cancer), Scemblix (chronic myeloid leukemia) and Pluvicto (prostate cancer). These drugs have put up a stellar performance, setting the momentum for the coming years.
Approval of new drugs and the label expansion of existing drugs will boost the top line. Heart failure drug Entresto and psoriasis drug Cosentyx have also significantly propelled sales. Label expansion of Entresto for hypertension and heart failure, and that of Cosentyx for the indication of hidradenitis suppurativa should continue to boost sales in the quarters ahead.
Other approved drugs like Kesimpta (multiple sclerosis) and Leqvio (heart and cholesterol disease) are also contributing to the top line and have further diversified Novartis’ area of operations. The recent spate of acquisitions, especially the acquisition of Germany-based MorphoSys AG, has also strengthened the company’s oncology pipeline and should diversify its portfolio further. The spin-off of the Sandoz business is allowing Novartis to focus on its core therapeutic areas.
The stock has gained 14.2% so far in 2024 compared with the industry’s rise of 24.2%.
In the past 60 days, Novartis’ earnings estimates for 2024 have risen from $7.31 to $7.50 per share. In the same time frame, the company’s earnings estimates for 2025 have risen from $8.21 to $8.29 per share.
Pfizer
Pfizer is one of the largest and most successful drug-makers in the field of oncology, comprising more than 26% of its total revenues. The company’s position in oncology was strengthened with the addition of Seagen in December 2023. Key drugs like Xtandi, Lorbrena, the Braftovi-Mektovi combination and Seagen’s cancer drugs are significantly boosting Pfizer’s sales in this segment. PFE has also ventured into the oncology biosimilars space and markets six biosimilars for cancer. Pfizer advanced its oncology clinical pipeline in 2024, with several candidates entering late-stage development. By 2030, the company expects to have eight or more blockbuster oncology medicines in its portfolio.
Though Pfizer’s COVID revenues are declining, its non-COVID operational revenues improved in the first half of 2024, driven by its key products like Prevnar, Vyndaqel and Eliquis; new launches like Abrysvo, Velsipity and Penbraya; newly acquired products like Nurtec; and those acquired from Seagen (December 2023). The trend is expected to continue in the second half. PFE’s new products/late-stage pipeline candidates, coupled with newly acquired products, including those acquired from Seagen, position it strongly for operational growth in 2025 and beyond. Pfizer expects 2025-2030 revenue CAGR to be 6%.
Huge profits from its COVID products strengthened its cash position. The funds are being used to make acquisitions, increase dividends, buy back shares and reduce debt. Continued growth in non-COVID sales and significant cost-reducing measures should drive profit growth.
Year to date, PFE shares have gained 3% compared with the industry’s growth of 24.2%.
The Zacks Consensus Estimate for Pfizer’s earnings has risen from $2.38 to $2.62 per share for 2024 over the past 60 days, whereas that for 2025 has increased from $2.75 per share to $2.85 per share.