The pharmaceutical industry has been witnessing increasing operating costs due to logistical disruptions and skyrocketing inflation rates. However, the U.S. Congress has been taking proactive steps to facilitate domestic pharmaceutical research and development. The recently announced Discounted Drugs for Clinical Trials Act is expected when passed to boost pharmaceutical research innovations while maintaining cost efficiency, driving the industry's long-term growth.
Amid an aging global population and surging chronic diseases, pharmaceutical companies are focused on expanding their product pipelines. These companies are leveraging tech integration and rapid medical advancements to develop effective treatments. Investors' interest in the pharmaceutical industry is evidenced by the VanEck Vectors Pharmaceutical ETF's (PPH) 4.7% returns over the past three months.
Given this backdrop, we think fundamentally strong yet-cheap pharmaceutical stocks Catalyst Pharmaceuticals, Inc. (CPRX), Radius Health, Inc. (RDUS), Assertio Holdings, Inc. (ASRT), Kamada Ltd. (KMDA), and Amneal Pharmaceuticals, Inc. (AMRX) could be wise bets.
Click here to checkout our Healthcare Sector Report for 2022
Catalyst Pharmaceuticals, Inc. (CPRX)
CPRX in Coral Gables, Fla., is a commercial-stage biopharmaceutical company that focuses on developing and commercializing therapies for people with rare debilitating, chronic neuromuscular, and neurological diseases in the United States.
On March 16, 2022, Patrick J. McEnany, CPRX's Chairman and CEO, said, "We believe we are well-positioned to build upon our success and are optimistic about the future of the company as we diligently pursue opportunities to diversify our commercial and development portfolio, which aligns with our core mission to deliver value to our patients, healthcare providers, and shareholders."
CPRX's total revenues came in at $38.31 million for the fourth quarter, ended Dec. 31, 2021, up 23.5% year-over-year. Its non-GAAP net income came in at $14.32 million, up 40.2% year-over-year. Also, its non-GAAP EPS came in at $0.13, up 30% year-over-year.
Analysts expect CPRX's revenue to be $199.99 million in 2022, representing a 42% year-over-year rise. The company's EPS is also expected to increase 86.5% to $0.69 in 2022. Over the past three months, the stock has gained 45.3% in price to close Friday's trading session at $8.05.
CPRX's POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
It has a B grade for Growth, Value, Sentiment, and Quality. It is ranked #12 of 169 stocks in the Medical - Pharmaceuticals industry. Click here to see the additional ratings for CPRX (Momentum and Stability).
Radius Health, Inc. (RDUS)
RDUS, is a Waltham, Mass.-based biopharmaceutical company that focuses on addressing unmet medical needs in bone health, orphan diseases, and oncology. The company's commercial product is TYMLOS. It has collaborations and license agreements with 3M Company; Ipsen Pharma SAS; Teijin Limited; Berlin-Chemie AG; Eisai Co. Ltd.; and Duke University.
On February 24, 2022, CEO Kelly Martin said, "The TYMLOS U.S. business improved in terms of productivity and product profitability, and, in the Japan market, which is the one of the largest anabolic markets, TYMLOS was approved."
For the fourth quarter, ended Dec. 31, 2021, RDUS' total revenue came in at $65.11 million, up 3.7% year-over-year. Its net loss was $15.58 million, compared to a $21.39 million loss in the previous period. And its loss per share came in at $0.33, compared to a $0.46 loss per share in the year-ago period.
RDUS' revenue is expected to be $280.67 million in 2023, representing a 13% year-over-year rise. The company's EPS is also expected to increase by 1,766.7% to $0.5 in 2023. Over the past three months, the stock has gained 14.4% in price to close Friday's trading session at $7.40.
It is no surprise that RDUS has an overall B rating, which equates to a Buy in our proprietary rating system. In addition, it has an A grade for Growth and a B grade for Value and Quality.
RDUS is ranked #32 in the Medical - Pharmaceuticals industry. Click here to see the additional POWR Ratings for RDUS (Momentum, Stability, Sentiment).
Assertio Holdings, Inc. (ASRT)
ASRT in Newark, Calif., is a specialty pharmaceutical company that offers differentiated products to patients utilizing a non-personal promotional model. The company continues to build a commercial portfolio by identifying new opportunities within its existing products and acquisitions or licensing of additional approved products.
On March 31, 2022, ASRT and BlinkRx announced a collaboration to support healthcare professionals and their patients undergoing treatment with Otrexup. Dan Peisert, ASRT's President and CEO, said, "We are thrilled to partner with a leading digital pharmacy provider in BlinkRx that offers a compelling, convenient option and which aligns to our strategy of leveraging our digital platform and virtual engagement to better serve our patients."
ASRT's total revenues came in at $33.33 million for the fourth quarter, ended Dec. 31, 2021, up 10.5% year-over-year. The company's EPS came in at $0.10, compared to a $0.81 loss per share in the prior-year period. Its non-GAAP EBITDA came in at $14.86 million compared to a$25.79 million loss in the year-ago period.
Analysts expect ASRT's revenue to be $131.71 million in 2022, representing an 18.6% year-over-year rise. The company's EPS is also expected to increase by 1,266.7% to $0.35 in 2022. Over the past six months, the stock gained 101.9% in price to close Friday's session at $2.16.
ASRT's POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our POWR Ratings system.
It has an A grade for Growth and a B grade for Value, Sentiment, and Quality. It is ranked #22 in the Medical - Pharmaceuticals industry. Click here to see the additional ratings for ASRT (Momentum and Stability).
Kamada Ltd. (KMDA)
Headquartered in Rehovot, Israel, KMDA develops, produces, and markets plasma-derived protein therapeutics for orphan indications. It operates in two segments- Proprietary Products and Distribution.
On March 15, 2022, Amir London, KMDA's CEO, said, "We are building on the strong foundation established over the years and entering 2022 as a ‘New Kamada’ – a fully integrated specialty plasma company, with six FDA-approved products and strong commercial capabilities in the U.S. market, as well as a global commercial footprint in over 30 countries."
KMDA's revenues from distribution for the fourth quarter, ended Dec/ 31, 2021, came in at $13.26 million, up 60.6% year-over-year. Its total assets were $318.67 million for the period ended Dec. 31, 2021, compared to $210.66 million for the period ended Dec. 31, 2020. The company's lease liabilities came in at $3.16 million compared to $3.59 million for the same period.
Analysts expect KMDA's EPS to increase 20% year-over-year to $0.12 in 2022. The stock closed Friday's trading session at $5.52.
It is no surprise that KMDA has an overall B rating, which equates to a Buy in our proprietary rating system. In addition, it has an A grade for Value and a B grade for Stability.
KMDA is ranked #24 in the Medical - Pharmaceuticals industry. In addition to the POWR Ratings I have just highlighted, we have also rated the stock for Growth, Momentum, Sentiment, and Quality. Click here to get all the KMDA ratings.
Amneal Pharmaceuticals, Inc. (AMRX)
AMRX and its subsidiaries develop, license, manufacture, market, and distribute generic and specialty pharmaceutical products for various dosage forms and therapeutic areas. The Hayward, Calif.-based company operates through three segments: Generics; Specialty; and AvKARE.
On March 2, 2022, Chirag and Chintu Patel, Co-CEOs, said, "We enter 2022 feeling great about our future growth prospects and well positioned as we focus on further diversifying and scaling in high-growth markets. We are proud of our team's execution and confident in creating substantial value for all stakeholders."
AMRX's net revenue came in at $536.90 million for the fourth quarter, ended Dec. 31, 2021, up 5.3% year-over-year. Its restricted cash came in at $8.95 million for the period ended Dec.31, 2021, compared to $5.74 million for the period ended Dec. 31, 2020. In addition, its long-term net debt came in at $2.68 billion compared to $2.74 billion for the same period.
AMRX's revenue is expected to increase 4.9% to $2.20 billion in 2022. Its EPS is expected to increase 15.3% to $0.98 in 2023. It surpassed EPS estimates in three of the trailing four quarters. The stock has closed Friday's trading session at $3.91.
AMRX has an overall B rating, which equates to a Buy in our POWR Ratings system. It has an A grade for Growth and Value. It is ranked #28 in the Medical - Pharmaceuticals industry. Click here to see the additional POWR Ratings for AMRX (Momentum, Stability, Sentiment, and Quality).
Click here to checkout our Healthcare Sector Report for 2022
What To Do Next?
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CPRX shares were trading at $8.21 per share on Monday afternoon, up $0.16 (+1.99%). Year-to-date, CPRX has gained 21.27%, versus a -10.49% 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.
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