Typically, specialty pharmaceutical companies either provide generic versions of former top-selling branded drugs or they may focus on drugs that target rare or hard to treat diseases as orphan drug manufacturers. One thing is for sure, they are often in the cross-hairs of the large cap pharmaceutical giants looking to expand their product lines. The specialty pharmaceutical analysts at Deutsche Bank A.G. (NYSE: DB) have done extensive work on prescription data in a new research report, and they have focused on some stocks to buy that have compelling sales and growth prospects. The kicker is, that some of these top names to buy may very well be bought themselves at some point.

Allergan Inc.‘s (NYSE: AGN) glaucoma franchise comprises two key brands, Alphagen/Combigan and Lumigan, which provide the cornerstone for the company’s eye care business. Despite intense competition, Allergan’s key brands continue to experience modest growth through solid life-cycle management. The Thomson/First Call price target for this top name is $102. Investors are paid a very small 0.2% dividend.

Auxilium Pharmaceuticals Inc. (NASDAQ: AUXL) has been often mentioned as a solid takeover candidate. Its Testim drug is a proprietary, topical testosterone replacement therapy gel (TRT) FDA approved for the treatment of male hypogonadism. Since its launch in the spring of 2003, Testim has steadily gained market share from entrenched competition via the company’s increased 150-person sales and marketing organization in the United States. The consensus price target for the stocks stands at $21.

Forest Laboratories Inc. (NYSE: FRX) is another name that is in the rumor mill as a large pharmaceutical takeover target, and it has been in that mill for years. The company’s first-quarter revenues grew 1.4% to $832.9 million, with net sales increasing 6% to $796.9 million. Total revenues were well above the consensus estimates of $799 million. The consensus price target for the stock is $41, which is below the current trading level.

Shire PLC‘s (NASDAQ: SHPG) ADHD franchise, which has been the principal growth engine of the company’s business over the past decade, represented 37% of 2011 revenues and 38% of 2012 revenues. While Adderall generics are being launched, the Deutsche Bank team thinks it will still remain a large part of the company’s overall revenue stream. The consensus price target for the stock is $110. Investors are paid a 0.9% dividend.

Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) had more than $4 billion dollars in global sales in 2012, as the leading provider of generic drugs in the world. Its first branded drug, Copaxone, contributed 20% to the 2012 numbers and almost 30% of profits. The consensus price target for the generic giant is $45. Investors are paid a 2.7% dividend.

Valeant Pharmaceuticals International Inc.‘s (NYSE: VRX) acquisition of Medicis made it the leading dermatology product provider in the United States, with segment sales approaching $2 billion. Valeant expanded its acne franchise via the Medicis purchase, with the addition of Solodyn — a once daily oral antibiotic (minocycline) launched in 2006 — and Ziana — a combination clindamycin/tretinoin topical gel introduced in 2007. The posted consensus price target for this fast growing company is $50, which is far below current trading levels and perhaps has not been updated.

All of the companies in the Deutsche Bank report are growing both revenues and their product lines. For the investors looking to inject alpha in to their portfolio, these may be just the stocks to buy that will accomplish that. Paired with big pharmaceutical stocks that pay good dividends, this is an important sector to add to any well-rounded portfolio.

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