The deepening of supply chain disruptions due to the continuing Russia-Ukraine war has led to increased production costs in the pharmaceutical industry. However, the industry continues to register solid growth with increasing demand from an aging population and breakthroughs in drug development.
Furthermore, with the resurgence of COVID-19 cases in several states, the pharmaceutical industry could attract heightened investor attention in the near term. Investors’ interest in the industry is evident in the SPDR S&P Pharmaceuticals ETF’s (XPH) 2.1% returns over the past three months. According to Firms World, the global pharmaceutical market is projected to grow at a 3 - 6% CAGR through 2024.
So, we think it could be wise to bet on under-the-radar pharmaceutical stocks Amphastar Pharmaceuticals, Inc. (AMPH) and Ironwood Pharmaceuticals, Inc. (IRWD), which possess sound fundamentals.
Click here to checkout our Healthcare Sector Report for 2022
Amphastar Pharmaceuticals, Inc. (AMPH)
Rancho Cucamonga, Calif.-based AMPH, a biopharmaceutical company, develops, manufactures, markets, and sells generic and proprietary injectable, inhalation, and intranasal products in the United States, China, and France. The company operates through two segments–Finished Pharmaceutical Products and API.
On April 8, 2022, the U.S. Food and Drug Administration approved AMPH’s Abbreviated New Drug Application for Ganirelix Acetate Injection. AMPH’s CEO and President, Dr. Jack Zhang, said, “We are excited about the FDA approval of our Ganirelix Acetate Injection. Ganirelix is the Company's fourth injectable peptide product approval. It represents our capabilities in executing our pipeline while furthering the development of our diabetes product portfolio.”
AMPH’s net revenues increased 26% year-over-year to $120.89 million in its fourth quarter, ended Dec. 31, 2021. Its adjusted non-GAAP net income came in at $20.83 million, up 160.6% year-over-year. Also, its adjusted non-GAAP EPS was $0.42, up 162.5% year-over-year.
Analysts expect AMPH’s revenue to increase 14.1% to $499.43 million in 2022. Its EPS is estimated to increase 25% per annum for the next five years. In addition, it has surpassed the consensus EPS estimates in three of the trailing four quarters. Over the past year, the stock has gained 118.9% in price to close yesterday’s session at $38.44.
AMPH’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
AMPH has a B grade for Growth and Sentiment. Within the Medical - Pharmaceuticals industry, it is ranked #21 of 172 stocks. Click here to see the additional POWR Ratings for Value, Momentum, Stability, and Quality for AMPH.
Ironwood Pharmaceuticals, Inc. (IRWD)
IRWD is a healthcare company that focuses on developing and commercializing gastrointestinal (GI) products. It has strategic partnerships with AbbVie Inc., AstraZeneca AB, and Astellas Pharma Inc. for the development and commercialization of linaclotide. IRWD is headquartered in Cambridge, Mass.
On Feb.17, 2022, Tom McCourt, IRWD’s CEO, said, “I am proud to share that LINZESS has earned blockbuster brand status with more than $1 billion in U.S. net sales in 2021, an extraordinary accomplishment for our company. I am also excited about what’s to come in 2022, as we strive to continue to execute on our key priorities of maximizing LINZESS growth via commercial innovation and lifecycle management, while also seeking to strengthen our innovative GI pipeline and focusing on delivering sustained profits and generating cash flow.”
IRWD’s total revenues came in at $117.13 million for the fourth quarter, ended Dec. 31, 2021, compared to $116.68 million in the previous period. Its cash and cash equivalents came in at $620.13 million for the period ended Dec.31, 2021, compared to $362.56 million for the period ended Dec.31, 2020. Also, its total current assets came in at $745.23 million, compared to $495.84 million for the same period in the prior year.
Analysts expect IRWD’s revenue to increase 8.1% year-over-year to $466.11 million in 2023. In addition, its EPS is expected to grow 72.6% per annum for the next five years. It has surpassed EPS estimates in three of the four trailing quarters. And over the past year, the stock has gained 8.5% in price to close yesterday’s trading session at $11.78.
IRWD has an overall B rating, which indicates a Buy in our proprietary rating system.
It has an A grade for Value and Quality. Within the Medical - Pharmaceuticals industry, it is ranked #38. Click here to see the additional POWR Ratings for Growth, Momentum, Stability, and Sentiment for IRWD.
Click here to checkout our Healthcare Sector Report for 2022
AMPH shares were trading at $37.94 per share on Friday morning, down $0.50 (-1.30%). Year-to-date, AMPH has gained 62.90%, versus a -9.08% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
2 Under-the-Radar Pharmaceutical Stocks to Add to Your Watchlist StockNews.com
