According to ReportLinker, the global pharmaceutical contract development and manufacturing market size is expected to grow at an 8.6% CAGR to $162.69 billion by 2026. However, because the stock market is expected to remain volatile in the near term on concerns over the impact of rising COVID-19 cases on the economic recovery, pharma stocks trading at high valuations could witness a pullback in the near term.
So, we think it could be wise to bet now on fundamentally sound stocks Amneal Pharmaceuticals, Inc. (AMRX), Catalyst Pharmaceuticals, Inc. (CPRX), and Kamada Ltd. (KMDA), which are currently trading below $10.
Click here to checkout our Healthcare Sector Report for 2021
Amneal Pharmaceuticals, Inc. (AMRX)
AMRX develops, licenses, manufactures, markets, and distributes generic and specialty pharmaceutical products for various dosage forms and therapeutic areas. The Hayward, Calif., company operates in three segments: Generics; Specialty; and AvKARE. The company sells its products through wholesalers, distributors, hospitals, and chain and individual pharmacies.
On June 7, 2021, AMRX launched Dihydroergotamine Autoinjector NDA for migraines and cluster headaches. Joseph Todisco, Chief Commercial Officer for Amneal Specialty, said, “The addition of the DHE autoinjector reflects our commitment to expand our Specialty portfolio by bringing impactful therapies that deliver differentiated value for patients in need.”
For the second quarter, ended June 30, 2021, AMRX’s revenue increased 15.2% year-over-year to $535.08 million. The company’s gross profit increased 47.3% year-over-year to $212.5 million. Its net income came in at $14.53 million compared to a $12 million loss in the year-ago period. Also, its EPS was $0.10, versus an $0.08 loss in the previous year quarter.
AMRX’s revenue is expected to be $2.14 billion in the current year, representing a 7.2% year-over-year rise. In addition, the company’s EPS is expected to increase 39.7% year-over-year to $0.88 in the current year. Over the past year, the stock has gained 22.5% in price to close yesterday’s trading session at $4.95.
AMRX’s POWR Ratings reflect this promising outlook. The POWR Ratings assess stocks by 118 different factors, each with its own weighting. The stock has an A grade for Growth and Value, and a B grade for Sentiment.
Within the Medical - Pharmaceuticals industry, it is ranked #37 of 216 stocks. Click here to see the additional POWR Ratings for AMRX (Quality, Stability, and Momentum).
Catalyst Pharmaceuticals, Inc. (CPRX)
CPRX develops and commercializes therapies for people with rare debilitating, chronic neuromuscular, and neurological diseases in the United States. Its special products include Firdapse for LEMS and Ruzurgi for the treatment of pediatric LEMS patients. CPRX is headquartered in Coral Gables, Fla.
On June 28, 2021, CPRX announced an exclusive license and supply agreement with DyDo Pharma for the development and commercialization of Firdapse in Japan. The agreement is expected to enhance its logistics operation and the company’s revenue in the coming months.
CPRX’s revenue increased 22.8% year-over-year to $36.37 million for the second quarter, ended June 30, 2021. The company’s net income increased 24.6% year-over-year to $12.18 million, while its EPS came in at $0.11, up 22.2% year-over-year. Also, its operating income was $15.84 million, up 54.0% year-over-year.
Analysts expect CPRX’s EPS to increase 41% year-over-year to $0.55 in its fiscal year 2022. Its revenue is expected to increase 20.3% year-over-year to $163.55 million in the next year. In addition, it has surpassed the consensus EPS estimates in three of the trailing four quarters. Over the past year, the stock has gained 48.8% in price to close yesterday’s trading session at $5.
CPRX’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system.
CPRX has an A grade for Value, and a B grade for Quality. Within the Medical - Pharmaceuticals industry, it is ranked #30. Click here to see the additional POWR Ratings for Sentiment, Growth, Stability, and Momentum for CPRX.
Kamada Ltd. (KMDA)
Headquartered in Rehovot, Israel, KMDA primarily develops, produces, and markets plasma-derived protein therapeutics for orphan indications. The company operates in two segments: Proprietary Products; and Distribution. It has strategic partnerships with Takeda Pharmaceutical Company Limited (TAK), PARI GmbH, and Kedrion Biopharma.
On June 2, Kedrion and KMDA announced the FDA approval of KEDRAB label update, confirming safety and effectiveness in children. Amir London, CEO of KMDA, said, “We believe that this label update may support an increase of KEDRAB’s U.S. market share. We anticipate that sales of KEDRAB will continue to grow meaningfully in the U.S., capturing a significant portion of the estimated annual $150 million U.S. HRIG market.”
For the second quarter, ended June 30, 2021, KMDA’s total assets increased 5% year-over-year to $216.35 million. The company’s total current liabilities decreased 13.6% year-over-year to $26.15 million. Also, its cash flow from investing activities was $10.63 million, compared to a $1 million loss in the year-ago period.
KMDA’s EPS is expected to increase 20.0% year-over-year to $0.12 in the next year. Over the past five years, the stock has gained 13.2% in price to close yesterday’s trading session at $5.36.
It’s 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. Click here to see the additional POWR Ratings for KMDA (Momentum, Quality, Growth, and Sentiment).
Click here to checkout our Healthcare Sector Report for 2021
AMRX shares were trading at $4.81 per share on Thursday afternoon, down $0.14 (-2.83%). Year-to-date, AMRX has gained 5.25%, versus a 20.00% 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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