Best pharmaceutical stocks to buy in 2022

Pharmaceuticals is a trillion-dollar industry that plays a vital role in our day to day lives by protecting us from dangerous diseases. Here are some of the leading pharma companies for the year ahead.
By:  &  Jayson Derrick
Updated: Sep 23, 2022
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This page gives you our top five pharma companies to invest in right now. Our experts have analysed the markets to choose the most potential stocks and a solid track record of success. Keep reading to find out which ones we’ve chosen, along with the reasons why.

What are the top pharmaceutical stocks to buy?

The table below ranks the best pharma companies in order of their future growth potential, as chosen by our team of experts. You can quickly find their up-to-date stock price through the table below, or scroll down to find out more information about each company.

#Stock symbolCompany nameTrade now
1PFEPfizer Inc.
2MRNAModerna Inc.
3JNJJohnson & Johnson
4TEVATeva Pharmaceuticals Limited
5NVSNovartis AG
List selected by our team of analysts, updated 09 September 2022.

1. Pfizer Inc. (NYSE:PFE)

Pfizer is an American pharmaceutical company that’s been around since 1849. It’s been most famous in recent years for its work on the coronavirus vaccine, but it has been successful developing treatments for things like breast cancer, arthritis, and stroke as well.

The COVID-19 vaccine, based on revolutionary ‘messenger RNA’ (mRNA) technology, is the key driver of Pfizer’s recent good performance and what earns it top spot on this list. The market for the vaccine is obviously huge, and the share price has reacted positively each time the company has been able to announce good news.

Looking ahead, Pfizer is starting to translate the vaccine development into long term revenues, having already signed contracts for more than $20bn worth of sales in the months and years ahead. It’s also been able to add hundreds of millions more to its R&D budget to develop more treatments using mRNA, so the future looks bright indeed.

2. Moderna Inc. (NASDAQ: MRNA)

Moderna is a much younger company, having only been founded in 2010. It uses mRNA technology exclusively to develop treatments, which was completely unproven until 2020. But Moderna’s own coronavirus vaccine was a proof-of-concept and catapulted the company into becoming a serious pharmaceutical player.

Until then, Moderna’s price was based almost entirely on speculation. Even so, the potential of mRNA treatments, which alter human cells directly and open up all sorts of opportunities to fight disease, was enough to turn Moderna into the biggest biotech IPO in history.

Moderna has always acted as much like a tech startup as a pharmaceutical company, prioritising growth over profits. That already led to its value increasing five times over in 2020, and its single-minded attitude means a higher likelihood of new treatments sending the price even higher in future.

3. Johnson & Johnson (NYSE: JNJ)

Johnson & Johnson is a giant, it’s one of the largest companies in the world and has been at the forefront of American healthcare for decades. It takes in around $90bn in revenue every year and sells everyday consumer healthcare products as well as developing its own treatments.

Pharmaceuticals bring in more than half J&J’s revenue, so researching new drugs and vaccines is crucial to the business. It has earned its place on this list by developing new cancer treatments in particular in recent years, which has meant the stock price has been trending up for a long time.

While J&J might not give you explosive growth, it’s a company you can rely on. It has increased its dividend for 58 straight years in a row, and seen off every different type of economic environment. There’s no reason to expect that to change any time soon.

4. Teva Pharmaceutical Industries Ltd (TLV:TEVA)

Teva is an Israeli-based pharma company that specialises in developing ‘generic’ drugs. That means it produces copycat versions of drugs created by other companies to sell at a lower cost once the patent for the original runs out.

Generic drugs are big business, and Teva is the largest manufacturer of them in the world. Despite that, it’s gone through a tough few years that have sent its stock price falling by more than 50% since 2015.

It’s made this list as one of the cheapest pharma companies out there. It still rakes in more than $15bn in revenue every year but its share price is significantly lower than the competition. As a company trading well below its value, it could represent a bounce back candidate for anyone who wants to take the plunge right now.

5. Novartis AG (SWX:NOVN)

Novartis is based in Switzerland and one of the biggest pharmaceutical companies in the world, ranking up there with Johnson & Johnson and Pfizer in terms of market cap. It develops a range of its own treatments for cancer, epilepsy, and kidney disease, among many others.

It makes this list, like J&J, thanks to its strong track record of reliable returns. It has increased its dividend for 24 years in a row and has been steadily increasing its share price since a major company restructure in 2015.

As with both J&J and Pfizer, Novartis is an ideal investment for anyone looking for slow and steady, reliable growth. It might even be undervalued compared to those two giants, so it represents an attractive opportunity to value investors looking for stocks trading below their market value.

Where to buy the best pharmaceutical shares

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What is a pharmaceutical stock?

Any company that develops, manufactures, or distributes products like drugs and vaccines. One of the defining features of pharmaceutical companies is how much they spend on research and development to discover new treatments. They also tend to be ‘defensive’ investments, because they can perform well in difficult economic environments.

Are pharmaceutical shares a good investment?

Yes, if you’re looking for steady and reliable returns rather than big growth opportunities. Occasionally biotech companies like Moderna grow rapidly, but in general the industry is more slow and steady than ‘to the moon’.

The big advantage of pharma stocks is that they can perform well even when the economy is struggling. Owning shares that aren’t affected too much by recessions can be a great way of balancing your portfolio, reducing your risk, and generating reliable returns.

As with any investment, it’s important to follow what’s going on in the news that might affect the pharmaceutical industry. New treatments and drug trials, for example, can directly impact the stock price of all companies in the sector. You can use our news section below to stay up to date.

Latest pharmaceuticals news

Eli Lilly & Co (NYSE: LLY) will continue to do well even as the U.S. Federal Reserve aggressively lift rates further, says Gina Sanchez – the Chief Executive of Chantico Global. Sanchez is bullish on its obesity drug Last year, the pharmaceutical giant reported promising results for its experimental…
Rite Aid Corporation (NYSE: RAD) tanked nearly 30% on Thursday after the drugstore chain reported bigger than expected loss for its fiscal second quarter and lowered guidance for the full year. Rite Aid Q2 earnings snapshot Lost $331.3 million versus the year-ago figure of $100.3 millionPer-share loss climbed significantly…
Biogen Inc. (NASDAQ:BIIB) gained more than 48% on Wednesday’s stock premarket. The stock was among the top trends on popular social trading platforms. There were definite reasons. On Tuesday, company news indicated that Biogen and Japanese Eisai had achieved success in Alzheimer’s…
Shares of Biogen Inc (NASDAQ: BIIB) shot up 40% on Wednesday after the biotech firm said its experimental Alzheimer’s drug showed promising results in a Phase III trial. Why is it a big news for Biogen? The Cambridge-headquartered multinational makes “Lecanemab” in collaboration with the Japan-based Eisai Co Ltd…
Moderna Inc (NASDAQ: MRNA) has taken a big hit over the past seven weeks, which, as per an Oppenheimer analyst, is a fantastic opportunity for the long-term investors. Reasons to own the Moderna stock At a price-to-earnings multiple of just over four, the biotech firm is quite attractive in…

Sources & references
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James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.
Jayson Derrick
Senior Editor of News
Jayson lives in Montreal with his wife and daughter, loves watching hockey, and is on a lifelong quest to perfect the art of Texas style BBQ. read more.