3 best biotech stocks to buy right now

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It’s no secret that the world’s population has aged dramatically over the past few decades. In fact, the global median age has steadily increased every decade, from 21.5 years in 1970 to 30.9 years last year due to a combination of declining birth rates and improved longevity. And with the global median age expected to reach 38.7 years by 2070, this trend is not going to go away anytime soon.

This begs the question: How can investors take advantage of this unstoppable demographic trend? Given that an aging population will likely need more prescription drugs, I think these three dividend-paying biotech stocks are great choices for investors to buy now.

Image source: Getty Images.

1. Viatris

As the global prescription drug industry is expected to grow from $ 1.03 trillion this year to $ 1.41 trillion by 2026, it will become increasingly important to patients, doctors and insurers across the country. around the world to control prescription drug spending. Increased focus on generics and biosimilars to cut costs should bode well for biotech stocks Viatris (NASDAQ: VTRS).

While 39% of its $ 13.5 billion in cumulative revenue to date has already come from generics and biosimilars, that share will grow even more in the years to come for two reasons. First, Viatris’ brand-name drugs (such as Viagra, Lipitor, and EpiPen) are likely to see continued decline in revenue as they have already been off-patent for some time. Second, the company is preparing a number of generic and biosimilar drug launches.

Semglee, which is the direct alternative to SanofiThe bestselling Lantus insulin. Semglee, which Viatris owns with Indian drugmaker Biocon Biologics, was recently the first insulin biosimilar to be added to Express scripts‘National Preferred Formulary – a list of insured drugs – that will allow even more patients to access the drug.

Viatris biosimilars for blockbuster drugs such as Eylea (used to treat diabetic retinopathy and wet age-related macular degeneration) and Avastin (used to treat various cancers) have been submitted to regulatory agencies and may soon receive an approval.

Along with its strong pipeline and promising outlook for generics and biosimilars, Viatris’ main selling point is its absurdly cheap valuation. Viatris’ sub-four futures price-to-earnings ratio and 3% dividend yield make it an obvious biotech stock buy for patient income investors.

2. Pfizer

Investors should also consider buying Pfizer (NYSE: PFE). Lately, this mega-capitalization pharmaceutical action is best known for the COVID-19 vaccine that it co-developed with BioNTech (NASDAQ: BNTX), known as Comirnaty, which he estimates will account for 44.2% of his $ 81.5 billion in expected revenue this year.

Yet Pfizer remains much more than its COVID vaccine. The company posted 7% year-over-year growth in its non-Comirnaty product portfolio in the third quarter, led by anticoagulant Eliquis and rare heart disease drugs Vyndaqel and Vyndamax, indicating overall strong portfolio.

Second, Pfizer’s oral pill used to treat COVID-19, known as Paxlovid, prematurely stopped clinical trials due to its positive results; it reduced the risk of hospitalization or death in patients at risk of developing serious disease by 89%. This will almost certainly give Pfizer a successful therapy after receiving Emergency Use Clearance (EUA) from the United States Food and Drug Administration (FDA), which might only be a few months away.

At $ 48 a share, Pfizer is listed at less than 12 times this year’s estimated adjusted earnings per share (EPS) – and while investors wait for the stock to receive a higher valuation multiple to reflect its culture of innovation, they can collect an attractive dividend yield of 3.2% well covered by its activity.

3. Bristol Myers Squibb

Almost 40% of American men and women will be diagnosed with cancer at some point in their lives, according to the National Cancer Institute. The good news is that cancer treatments continue to improve, and one of the companies responsible for major scientific breakthroughs in cancer treatment is Bristol Myers Squibb (NYSE: BMY).

Revlimid and Opdivo are two of Bristol Myers’ three best-selling drugs that are used to treat patients with various forms of cancer, which accounted for 43.7% of the company’s $ 34.4 billion in total sales. since the beginning of the year.

While Revlimid, Opdivo and Eliquis – a blood thinning blockbuster shared with Pfizer – are all on the verge of losing their exclusivity this decade, Bristol Myers has the pipeline to eventually overtake these drugs. This is because the company has more than 50 compounds in various stages of development.

Bristol Myers is trading at just eight times this year’s adjusted EPS forecast, while producing a rate 3.3% above the market. That, along with the company’s strong pipeline, makes the stock a stock you can consider buying and holding for a long time.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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