Investors favor the pharmaceutical sector for its consistent profitability regardless of economic conditions. Additionally, the industry is well-positioned for growth due to the rise in chronic diseases, a rapidly aging population, and the development of drugs for rare conditions.
To that end, it could be wise to buy fundamentally strong pharma stocks: Merck & Co., Inc. (MRK – Get Rating), Johnson & Johnson (JNJ – Get Rating), and AbbVie Inc. (ABBV – Get Rating).
Before diving deeper into the fundamentals of these stocks, let’s discuss why the pharmaceutical industry is well-positioned for growth.
The pharmaceutical market is thriving thanks to the introduction of innovative drugs and rising demand for quality drugs and therapies, particularly in emerging countries. This year, global revenues are set to hit $1.12 trillion, and projections indicate a future market size of $1.48 trillion by 2028, growing at a CAGR of 5.8%.
The United States will likely command a 43.7% market share in the global pharmaceutical industry in 2023. Furthermore, the U.S. is expected to spend between $605 billion and $635 billion on medicines by 2025.
Moreover, global spending on medications is on the rise. A report by the IQVIA Institute for Human Data Science forecasts that by 2027, worldwide spending on medicines will reach around $1.9 trillion, with a growth rate of 3-6%, driven by the introduction of new drugs and increased use of recently launched brands.
On top of it, AI is transforming the pharmaceutical sector by revolutionizing drug discovery, improving manufacturing processes, and fostering strategic partnerships. Companies are prioritizing innovation to bolster patent portfolios and make strategic AI investments.
Considering these conducive trends, let’s take a look at…
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