Dan Moskowitz: Top 10 Pharma Stocks for 2015

BIOMARIN PHARMACEUTICAL believes that the near-term approval of Drisapersen in the United States or Europe will lead to profitability in 2017. Regardless of the industry, when a company goes from consistent losses to profitability, it has the potential to see significant stock appreciation. The risk here is that it could be a buy-on-the-rumor/sell-on-the-news situation. Setting up a stop-limit order can help protect you to the downside.

ILLUMINA INC. has delivered 13 consecutive quarters of revenue growth. In 2015, revenue is expected to increase 20% year over year, with adjusted earnings per share coming in between $3.12 and $3.18. Illumina is well-diversified with exposure to life sciences, reproductive & genetic health, oncology, enterprise informatics, and new & emerging markets.

ABBVIE INC. beat its original projections on both the top and bottom lines. The company returned to growth last year — one year earlier than expected. That growth is expected to continue in 2015. For instance, AbbVie recently affirmed its FY2015 adjusted diluted EPS expectation of $4.25-$4.45, which would represent industry-leading growth. AbbVie also offers a dividend yield of 3.40% (as of March 5, 2015).

ALEXION PHARMACEUTICALS saw its net sales jump 44% to $2.234 billion. As far as the future goes, consider the following quote from Chairman, CEO, and M.D., Leonard Bell: “Throughout 2015, we will focus on serving more patients with PNH (a blood disorder) and aHUS (a very rare disease) globally while also preparing for the launch of asfotase alfa (an experimental enzyme replacement therapy). At the same time, we will advance our lead development programs as we drive toward as many as seven potential new indications or product approvals through 2018.”

LANNET COMPANY INC., is in the right place at the right time given its manufacturing and distribution of generic drugs. Q2 net sales skyrocketed 71%, and Lannett has now delivered nine consecutive quarters of record net sales. Gross profit also improved to 76% of net sales from 61% of net sales. Looking ahead, Lannett raised its FY2015 guidance; expected net sales should rise to $395-405 million from $370-390 million, and its gross margin should rise to 74-75% of sales from 73-75% of sales.

VALEANT PHARMACEUTICALS INTERNATIONAL INC In FY2014, total revenue at Valeant Pharmaceuticals International, Inc. (VRX) jumped 43%. In FY2015, the company expects outperformance in the United States to offset a foreign exchange impact thanks to strength in dermatology. Valeant is also seeing strong growth in China, the Middle East, and Russia.

BRISTOL-MYERS SQUIBB COMPANY recently hit a 14-year high. Having a seemingly never-ending pipeline and access to substantial capital certainly helps. In recent news, Bristol-Myers Squibb recently made a deal with Bavarian Nordic for Prostvac (a prostate cancer treatment). Unlike Dendreon’s cost-heavy Provenge, Prostvac isn’t developed on a per-patient basis. Bristol-Myers Squibb will learn from Dendreon’s mistakes and implement the correct strategies. Bristol-Myers Squibb currently yields 2.40%.

JOHNSON & JOHNSON increased 4.2%, with EPS jumping 8.2%. Those might not seem like outstanding numbers, but they’re impressive for a mature company. Johnson & Johnson has reported seeing significant momentum in the pharmaceutical business. Its medical devices businesses is also performing well thanks to innovation, scale and breadth. Johnson & Johnson currently yields 2.40%

ACTAVIS PLC Q4 revenue increased 44% to $4 billion for Actavis plc (ACT). Non-GAAP EPS improved to $3.91. In FY2015, Actavis expects total revenue of $15 billion (FY2014 revenue was $13 billion). This shouldn’t come as no surprise considering six of the company’s top ten brands saw double-digit growth in 2014 in North America.

JAZZ PHARMACEUTICALS Xyrem, made by Jazz Pharmaceuticals PLC (JAZZ), is the only FDA approved drug for cataplexy (a symptom of narcolepsy) and excessive daytime sleepiness. Exclusivity such as this leads to strong sales potential. Even prior to this announcement, Q4 revenue and EPS increased 39% and 42%, respectively.