Healthcare Business

5 Large Biotech and Pharma Stocks Are Dirt Cheap, and Not Because of COVID-19

However, in the United States, the FDA granted remdesivir an Emergency Use Authorization for the treatment of hospitalized patients with severe COVID-19. The company has secured hundreds of thousands of treatment courses in the United States so far, and there is definitely more to come as clinical trials progress. Gilead Sciences stock closed Tuesday at $70.88. It has a consensus price target of $70.88 and a 52-week trading range of $60.89 to $85.97.


Out of this group, Merck & Co. Inc. (NYSE: MRK) is down the worst, with its stock posting a loss of 10% year to date. What’s strange here is that the firm has a few irons in the COVID-19 fire, and it is accelerating two vaccine development efforts and a novel antiviral candidate. Even its most recent earnings report was very favorable on the back of its blockbuster drug Keytruda.

The firm also pays a dividend of 3%, so investors may be scratching their heads at this one. Merck stock last closed at $81.67, with a consensus price target of $93.82. The stock has traded in a range of $65.25 to $92.64 over the past year.


One of the front-runners for a COVID-19 vaccine, Pfizer Inc. (NYSE: PFE) has partnered with BioNTech. Despite this, the stock is down 2% year to date, which seems absurd, as BioNTech is up over 145% in the same time. Note that BioNTech is taking the lead on the vaccine effort, using its platform, while Pfizer will handle manufacturing and distribution. So in a sense, Pfizer hasn’t made its money yet because there is no vaccine to sell.

In its most recent earnings report, Pfizer beat consensus estimates, which is a net positive, but more investors are paying attention to its coronavirus developments. Pfizer stock most recently closed at $38.39, in a 52-week range of $27.88 to $40.97. The consensus price target is $41.85.

Royalty Pharma

While Royalty Pharma PLC (NASDAQ: RPRX) only came public recently, there is tremendous upside for this stock as analysts have a consensus price target of $52.29, while the most recent close is $43.20. For those that missed the initial public offering, Royalty Pharma entered with a bang, blowing past its initial pricing by a mile.

Note that this is not a pharmaceutical company in the traditional sense. It has assembled a portfolio of royalties that entitles it to payments based directly on the top-line sales of many of the industry’s leading therapies. Royalty Pharma stock trades in a 52-week range of $39.90 to $56.50.

Alexion Pharmaceuticals

Alexion Pharmaceuticals Inc. (NASDAQ: ALXN) posted positive earnings, with total second-quarter revenues rising 20% from a year earlier. Its stock rose about 0.2% in response, including the good news ahead.

As for why Alexion may be cheap to the eye of biotech investors, it just has a lot more upside than almost all profitable and established major drug companies and biotechs. It is currently valued at only about 10 times earnings, and it is expected to post close to double-digit sales growth of up to $6 billion in 2021.

Alexion stock last closed at $105.22, with a consensus price target of $141.47. The 52-week trading range is $72.67 to $125.52.

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