"Since more and more companies in the US are looking towards China for deals regarding the next promising molecule, whether in the obesity or cancer space, the impact of tariffs on this ongoing trend has become a subject of significant discussion in the healthcare industry. On February 7, Carlo Rizzuto, Versant Ventures managing director, appeared on CNBC's 'Fast Money' to discuss the impact of tariffs on healthcare. Rizzuto believed that there are two ways in which tariffs could impact the industry. The first would be products innovated in China and brought over to the US or other markets. To understand how the tariffs would affect such trade processes, the industry would have to see how the tariffs are actually structured in the market.
Angelica Peebles, CNBC's Health and Pharma reporter, sat with Eli Lilly's Chief Scientific Officer to talk about the weight loss sector. From the conversation, she reported that the domain poses opportunity for drugs that are easier to use, such as pills, and medicines that make people lose more weight. Another debate people are having regarding the domain is how much weight loss users need to see on top of what they already have. Drugs delivering around 20% weight loss appear to benefit most of the audience, according to Eli Lilly's Chief Scientific Officer Dan Skovronsky. He sees more potent drugs that deliver around 25% or more as having a smaller market.
He was further of the opinion that the most exciting thing he has seen in his career as a scientist and physician is how a multitude of diseases can potentially benefit from these weight loss drugs. Right now, their source for this information is the trends they have been seeing in patients' responses.
We used stock screeners to compile a list of pharma stocks that experienced significant declines over the past year. We then selected the 10 stocks with the highest analyst upside potential. We also added the number of hedge fund holders for these stocks, as of Q3 2024. The list is sorted in ascending order of analyst upside potential, as of February 21, 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
A laboratory with workers in masks and lab coats focused on analyzing cell therapies.
Legend Biotech Corporation (NASDAQ:LEGN) is a clinical-stage company that develops, discovers, manufactures, and commercializes novel therapies for oncology and other indications. It develops advanced cell therapies across an elaborate range of technology platforms. The company operates in the US, China, and other geographical segments.
The company is rapidly building a strong product portfolio with 11 pipeline programs in hematologic malignancies, solid tumors, and autoimmune diseases. The CARVYKTI therapy for multiple myeloma proved the most successful CAR-T launch to date, drawing $334 million in net trade sales in fiscal Q4 2024.
Legend Biotech Corporation (NASDAQ:LEGN) anticipates CARVYKTI's potential to be $5.0 billion, potentially supporting the company's growth initiatives. It is partnering with industry leaders, such as Johnson & Johnson and Novartis, to materialize this potential and expedite the development and commercialization of its therapies.
TimesSquare Capital US Focus Growth Strategy stated the following regarding Legend Biotech Corporation (NASDAQ:LEGN) in its first quarter 2024 investor letter:
"We began buying shares in Legend Biotech Corporation (NASDAQ:LEGN), a biotechnology developer of cell therapies to treat blood cancers such as multiple myeloma and leukemia. The European Union approved using Legend's Carvykti treatment of multiple myeloma and later the FDA followed suit. Some investors may have been concerned about possible delays as Legend ramps up production, and its price declined. Though with a long-standing agreement with Johnson & Johnson and a new partnership with Novartis, we see a long runway of growth ahead, so we initiated a position."
Overall, LEGN ranks 3rd on our list of the most oversold pharma stocks to buy according to analysts. While we acknowledge the potential of LEGN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LEGN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.