Top 2 pharma stocks to buy amid surge in deadly fungi

Recent data cited by Bloomberg reveals that deadly fungi, including Candida auris, have been spreading globally since the COVID-19 pandemic.

Climate change has enabled many of these illness-causing agents to adapt to higher temperatures, making them even more potent challengers to the body’s natural defenses, which operate at around 37ºC.

With deadly fungal outbreaks on the rise, investors should consider building strategic positions in companies that could play a significant role in combating this growing health threat.

Here are the top two pharmaceutical stocks worth buying amidst this surge in disease-causing fungi.

Gilead Sciences Inc (NASDAQ: GILD)

Gilead is widely recognized for its antiviral treatments but is also significantly involved in developing antifungal medications.

One of its key antifungal treatments is AmBisome.

Gilead stock is an excellent pick amidst the ongoing surge in deadly fungi due to its history of addressing such health threats.

For instance, when COVID-19 hit in 2020, Gilead was the first company to launch an antiviral medicine, Veklury, to treat the deadly respiratory illness.

Additionally, the biopharmaceutical giant invests billions each year in research and development (R&D), indicating that Gilead has the necessary resources to advance its pipeline of antifungal treatments and help combat the increasing threat of deadly fungal outbreaks.

Investment firm Redburn Atlantic currently has a price target of $123 on Gilead shares, suggesting a potential upside of more than 35% from current levels.

Furthermore, the stock offers a healthy dividend yield of 3.40%, making it an attractive addition to any portfolio. Our market analyst Crispus Nyaga is also bullish on GILD.

Merck & Co Inc (NYSE: MRK)

Merck is another US-based pharmaceutical giant with a substantial presence in antifungal treatments, including Cancidas.

The company invests heavily in developing new and improved medicines, particularly for fungal infections, to maintain its competitive edge.

However, unlike Gilead, Merck’s stock has lost over 20% in the past four months, making it relatively more attractive in terms of valuation.

Merck reported $60.1 billion in worldwide sales last year but expects that number to rise between $63.6 billion and $64.1 billion in 2024, signaling management’s confidence in continued growth.

Wall Street currently holds a consensus “overweight” rating on Merck shares, with analysts projecting an average price target of $133, translating to about 30% upside from current levels.

Finally, Merck stock is also suitable for income investors, offering a dividend yield of 3.02%, which enhances its appeal for generating passive income amid the potential economic slowdown many believe will impact the US economy in 2025.