Despite the global supply chain disruptions, rising raw material costs, and labor shortages, the pharma industry has witnessed sustained growth thanks to a surge in medical needs amid the COVID-19 pandemic. Furthermore, the industry benefited from a record number of drug approvals last year.
Continuing improvement in research techniques and increasing demand for medical services from an aging population should keep driving the industry’s growth. According to Grand View Research, the global pharmaceutical manufacturing market size is expected to grow at an 11.3% CAGR from 2021 - 2028.
Therefore, amid the current market volatility, we think it could be wise to bet on fundamentally sound mid-cap pharmaceutical stocks Dr. Reddy's Laboratories Limited (RDY), Bausch Health Companies Inc. (BHC), Ipsen S.A. (IPSEY), and H. Lundbeck A/S (HLUYY).
Click here to checkout our Healthcare Sector Report for 2022
Dr. Reddy's Laboratories Limited (RDY)
Headquartered in Hyderabad, India, RDY and its subsidiaries operate worldwide as an integrated pharmaceutical company. The company operates through Global Generics; Pharmaceutical Services and Active Ingredients (PSAI); and Proprietary Products and Others segments. Its market capitalization is $9.83 billion.
On Jan. 28, 2022, RDY Co-Chairman and Managing Director, G V Prasad, said, “We delivered a steady performance in Q3 with healthy EBITDA and strong cash generation, while continuing to invest in building a pipeline of products across businesses. I am pleased that our early adoption and consistency in furthering our sustainability agenda have been recognized with prestigious awards in the last few months. ESG will remain a key focus area for us.”
RDY’s revenues increased 7.9% year-over-year to ₹53.20 billion ($710.65 million) for the third quarter, ended Dec. 31, 2021. The company’s gross profit came in at ₹28.61 billion ($382.23 million), up 7.8% year-over-year. Also, its profit for the period was ₹7.07 billion ($94.38 million), up 3,468.2% year-over-year.
For its fiscal 2022, analysts expect RDY’s revenue to be $2.94 billion, representing a 13.5% year-over-year rise. In addition, the company’s EPS is also expected to increase 65.6% year-over-year to $2.60 for fiscal 2022. The stock closed yesterday’s trading session at $58.57.
RDY’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our POWR Rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
Also, the stock has a B grade for Growth, Value, and Stability. Within the Medical - Pharmaceuticals industry, it is ranked #18 of 182 stocks. Click here to see the additional POWR Ratings for Momentum, Sentiment, and Quality for RDY.
Bausch Health Companies Inc. (BHC)
Based in Laval, Canada, BHC develops, manufactures, and markets a range of pharmaceutical, medical device, and over-the-counter products, primarily in the therapeutic areas of eye health, gastroenterology, and dermatology. It has four segments: Bausch + Lomb/International; Salix; Ortho Dermatologics; and Diversified Products. Its market capitalization is $9.03 billion.
On Nov. 2, 2021, Joseph C. Papa, BHC Chairman and CEO, said, “We have remained steadfast in our commitment and have been working diligently to accelerate the strategic alternatives process that will enable us to unlock value in our three attractive businesses as soon as possible.”
BHC’s net income increased 164.8% year-over-year to $188 million for its fiscal third quarter, ended Sept. 30, 2021. Its operating income came in at $574 million, up 24.8% year-over-year. In addition, its EBITDA was $944 million, up 6.8% year-over-year.
Analysts expect BHC’s revenue to increase 3.8% year-over-year to $11.18 billion in fiscal 2022. Its EPS is also estimated to grow 11.5% year-over-year to $6.02 for fiscal 2022. The stock closed yesterday’s trading session at $25.13.
BHC’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.
BHC has an A grade for Value and a B grade for Growth. Within the Medical - Pharmaceuticals industry, it is ranked #21. Click here to see the additional POWR Ratings for Stability, Momentum, Sentiment, and Quality for BHC.
Ipsen S.A. (IPSEY)
Headquartered in Boulogne-Billancourt, France, IPSEY operates as a biopharmaceutical company worldwide. The company provides drugs in oncology, neuroscience, gastroenterology, cognitive disorders, and rare diseases. Its market capitalization is $8.35 billion.
On Dec. 17, 2021, IPSEY and GENFIT (GNFT) entered a long-term strategic partnership for global collaboration. David Loew, IPSEY CEO, said, “Today’s announcement marks an exciting new stage in Ipsen’s ambitions to expand our portfolio to support more people living with rare diseases around the world. We are excited by elafibranor’s data package, which demonstrates the potential benefit of this first-in-class, innovative treatment option to help the PBC community.”
IPSEY’s specialty care sales came in at €667.8 million ($754.01 million) for the third quarter, up 15% year-over-year. Its consumer healthcare sales increased 12.9% year-over-year to €59.6 million ($67.29 million), and its total sales came in at €727.4 million ($821.31 million), up 14.9% year-over-year.
Over the past year, the stock has gained 12.6% in price to close yesterday’s trading session at $25.30.
IPSEY’s strong fundamentals are reflected in its POWR ratings. The stock has an overall B rating, which translates to a Buy in our proprietary rating system.
In addition, it has an A grade for Value and Stability and a B grade for Growth and Quality. It is ranked #12 in the Medical - Pharmaceuticals industry. Click here to see the additional POWR Ratings for IPSEY (Momentum and Sentiment).
Lundbeck A/S (HLUYY)
Based in Valby, Denmark, HLUYY, a biopharmaceutical company that researches, develops, produces, and sells pharmaceuticals to treat psychiatric and neurological disorders in Europe, North America, and internationally. Its market capitalization is $5.05 billion.
HLUYY’s President and CEO, Deborah Dunsire, said: “Our brands are continuing to perform well across all markets and delivering solid growth, and Vyepti continues to have good uptake. Our transformed approach to R&D is showing results, with an expanding early- and mid-stage pipeline. The recent addition of an early-stage CD40L inhibitor into our early-stage portfolio gives us a promising start to develop our neuroimmunology platform further. I see a strong future ahead of us.”
HLUYY’s comprehensive income came in at Kr.533 million ($80.95 million) for the third quarter, ended Sept. 30, 2021, up 97.4% year-over-year. Also, its total liabilities came in at Kr.17.04 billion ($2.59 billion), compared to Kr.19.91 billion ($3.02 billion) for the same period.
HLUYY’s revenue is expected to increase 7.1% to $668.07 million for the second quarter of its fiscal 2022. The stock closed yesterday’s trading session at $25.43.
HLUYY has an overall B rating, which translates to a Buy in our POWR Ratings system. It has an A grade for Value and Stability and a B grade for Quality.
HLUYY is ranked #28 in the Medical - Pharmaceuticals industry. Click here to check other additional ratings for HLUYY (Growth, Momentum, and Sentiment).
Click here to checkout our Healthcare Sector Report for 2022
RDY shares were unchanged in premarket trading Thursday. Year-to-date, RDY has declined -10.46%, versus a -3.71% 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.
4 Mid-Cap Pharmaceutical Stocks to Buy This Month StockNews.com
