Makers of the 10 Top-Selling Cancer Drugs Catch the Eye of Analyst

By Lee Jackson Published Oct 2, 8:55AM EDT

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One sad thing for almost every citizen in the United States is that at one point almost all of us will either have cancer or have a friend or relative who does. In fact, according to the American Cancer Society, there will be an estimated 1.7 million new cases of cancer, and nearly 600,000 deaths from it, in the country this year. Cancer is the second most common cause of death, behind only heart disease. The lifetime risk of developing cancer is 44% for men and 38% for women, and the risk of dying from cancer is 23% in men and 19% in women. The bottom line is that much of the U.S. population will be treated for cancer during their lifetime.

A new report from the analysts at Cowen highlights the 10 top-selling cancer drugs and the companies that produce them. It may be grim subject matter, but for investors looking for opportunity, it is the holy grail of oncology drug sales.

Celgene Inc. (NASDAQ: CELG) may have the biggest potential winner for investors trying to handicap forward sales. The company has the fifth top-selling oncology drug with Revlimid, which sold $4.3 billion last year. The encouraging aspect for Celgene shareholders is that sales were up a solid 14% year-over-year, which could translate to big earnings gains for the company. The Thomson/First Call consensus price target for Celgene shares is $103.80. Shares closed Wednesday at $93.43.

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Novartis A.G. (NYSE: NVS) is the manufacturer of the fourth top-selling oncology drug in the world, which is called Gleevec. The drug had $4.7 billion in sales, but it is showing 0% year-over year sales growth, which could prove troubling for Novartis. Physicians may be switching patients to other medications. The consensus price target for Novartis is $95.74. Shares closed Wednesday at $93.22.

Eli Lilly & Co. (NYSE: LLY) is an old-school U.S. pharmaceutical company that has the number six top-selling oncology drug. The company’s Alimta sold $2.4 billion last year, which was up 4% over the previous year. Eli Lilly is a company that could be keeping its corporate eye out for an acquisition to help boost oncology revenues. Investors are paid a very solid 3.2% dividend. The consensus price target for the stock is $64.94. Lilly closed near that level at $65.08 on Wednesday.

Johnson & Johnson (NYSE: JNJ) partners with Takeda on Velcade, which is the seventh top-selling oncology drug with $2.3 billion in sales. The year-over-years numbers are dreadful as that figure is an 8% drop for the prior year’s total. The company also has the ninth top-selling drug, which is Zytiga. While it only posted $1.7 billion in sales, that figure was up a gigantic 77% from the year before. The company pays shareholders a solid 2.8% dividend. The consensus price target is $109.13. Shares closed trading at $104.30.

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Bristol-Myers Squibb Co. (NYSE: BMY) partners with European drug giant Merck KGaA on Erbitux, which was the eighth top-selling cancer drug last year. Shareholders receive a 2.9% dividend from the company. The consensus price objective for the stock is $53, and shares closed trading Wednesday at $50.53.

Biogen-Idec Inc. (NASDAQ: BIIB), along with Roche Holdings, co-produces and markets the top-selling oncology drug in the world, Rituxan. Last year’s sales for the drug were $7.4 billion, which was up 6% year-over-year. The consensus price target for Biogen Idec is $376.76. The stock closed Wednesday at $323.50.

Note that Roche trades on the pink-sheets here in the United States, for reasons never quite understood given the pharmaceutical giant’s huge global footprint. By doing so, foreign companies get access to American investors at less cost and without having to follow most U.S. securities rules. Roche currently produces or co-produces and markets four of the top-selling oncology drugs on the market: Avastin, which was the number two top-selling drug at $6.7 billion; Herceptin, which was third at $6.5 billion; and Xeloda, which was 10th at $1.6 billion in sales.

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The data is grim, and it doesn’t lie. Cancer is increasing, and sales of these top oncology drugs are likely to increase as well. More conservative investors may want to consider one of the large pharmaceutical stocks for exposure and less volatility.

About the Author Lee Jackson →

Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad and diverse career, which included a stint as the creative services director at the NBC affiliate in Austin, Texas, gives him unique insight into the financial industry and world.

Lee Jackson's journey in the financial industry spans over 30 years, with nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career was marked by his presence on the sell side during pivotal Wall Street events, from the dot.com rise and bubble to the Long Term Capital Management debacle, 9/11, and the Great Recession of 2008. This is a testament to his resilience and adaptability in the face of market volatility.

Lee Jackson’s practical financial industry experience, acquired from a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing on various platforms. This unique combination allows him to shed light on the intricacies and workings of Wall Street in a way that only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.

Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.