Growing optimism over the pharmaceutical industry’s growth prospects amid the COVID-19 pandemic has bolstered the performance of certain dominant pharma players. As pharma companies continue to invest heavily in drug development to capitalize on rising demand from an aging population, they are well positioned to achieve extraordinary growth going forward. Given the tremendous growth potential of Johnson & Johnson (JNJ), Pfizer (PFE), and Bristol-Myers Squibb (NYSE:BMY), we think these stocks could be solid bets now. So, let’s take a closer look at these names.Since the onset of the pandemic—which hamstrung many other business sectors with severe and various public health restrictions—the pharmaceuticals sector has taken center stage. This is evident in the SPDR S&P Pharmaceuticals ETF’s (XPH) 43.7% returns from March 23, 2020, to March 23, 2021. Indeed, optimism surrounding the prospects of the pharmaceutical industry is justified given that the industry has become the key to saving the world from an unprecedented healthcare crisis. With several countries prioritizing the inoculation of their populations to fight coming new strains of the COVID-19 virus, pharmaceutical companies are currently focused on boosting their manufacturing capacity to meet the growing demand.
The pharma sector is expected to experience rapid growth due to positive sentiments fueled by increasing vaccination drives globally, surging demand for customized medicines and healthcare products, and increasing investments in R&D for developing drugs to meet growing demand from an aging population. The global pharmaceuticals market is expected to reach $1700.97 billion in 2025, representing an 8% CAGR.
As such, we think major companies in this space, Johnson & Johnson (JNJ), Pfizer Inc. (NYSE:PFE), and Bristol-Myers Squibb Co. (BMY), which are investing heavily in R&D to diversify their portfolios and are expected to maintain strong financials, should deliver excellent returns this year and beyond as demand for vaccines and healthcare products continue to soar.