10 Pharma Stocks With 100% Buy Ratings

NEW YORK (TheStreet) -- The following 10 global pharmaceutical stocks will likely benefit from the expanding global pharmaceutical markets, which are poised to grow at 5%-7% in 2011 to $880 billion, according to IMS Health. 17 Pharmemerging markets, including China and India, are forecast to grow at 15%-17% in 2011 to $180 billion, faster than the global markets.

Analysts give these 10 stocks a 100% buy ratings. In comparison, pharma giants Johnson & Johnson ( JNJ), Pfizer ( PFE), Merck ( MRK), Abbott Laboratories ( ABT), Bristol Myers Squibb ( BMY) and Eli Lilly ( LLY) have buy ratings in the range of 8.3%-71.4%.

In addition, analysts expect these 10 stocks to outperform their peers and broader markets, based on the upside implied from their respective 12-month price targets. These stocks have an implied upside potential of 25%-147% with a mean upside value of around 91%.

With five analysts covering the stock, Aegerion Pharmaceuticals ( AEGR) has 100% buy ratings, however, we have not included the stock in our discussion since analysts expect the stock to have an upside of only 12%, much lower than the 10 stocks listed here. The other stocks that do not find a place here are AVANIR Pharmaceuticals ( AVNR), Somaxon Pharmaceuticals ( SOMX), Biostar Pharmaceuticals ( BSPM), Threshold Pharmaceuticals ( THLD), EpiCept ( EPCT), Ventrus Biosciences ( VTUS) and Repros Therapeutics ( RPRX), even though they are expected to have triple-digit upsides because only a few analysts cover these stocks.

The stocks are stacked in an ascending order based on the number of analysts covering each stock and, in case of a tie-up, by implied percentage upside.

10. BioDelivery Sciences International ( BDSI) is development-stage, specialty pharmaceutical company using licensed and proprietary drug delivery technologies to develop and commercialize new therapeutic formulations.

BioDelivery recently refuted a patent infringement lawsuit filed by MonoSol RX. In a press release, Dr. Mark A. Sirgo, president and CEO, said, "Our manufacturing process for ONSOLIS, which MonoSol asserts infringes its process patent, is a trade secret for which no one has any access. MonoSol has failed to disclose any basis for its assertion that our confidential, proprietary manufacturing process infringes its newly-issued patent." He added, "Importantly, we have not and will not allow this meritless claim to distract us from driving our promising development pipeline forward including our aggressive pursuit of BEMA Buprenorphine for the treatment of chronic pain and BEMA Buprenorphine/Naloxone for the treatment of opioid dependence."

The stock will likely provide an upside of 91% over the next 12 months with a consensus target price of $6.3, according to analysts polled by Bloomberg. In comparison, Hospira ( HSP), Watson Pharmaceuticals ( WPI), Cephalon ( CEPH), King Pharmaceuticals ( KG) and Akorn ( AKRX) are likely to return around 27%, 8%, 24%, -5% and 45%, respectively.

All the four analysts covering the stock recommend buying.

9. China Pharma Holdings ( CPHI), operating through its subsidiaries, manufactures drugs, including Chinese medicines. The company's products are used in the treatment of central nervous system disorders, cerebral and cardio vascular diseases, infectious, respiratory and digestive ailments.

Analysts polled by Bloomberg expect the company to report earnings per share of 16 cents 2010 fourth quarter, compared to 12 cents and 13 cents per share in the year-ago and quarter-ago periods, respectively. For the full year, the company is likely to report earnings per share of 52 cents for 2010, 56 cents for 2011 and 65 cents for 2012, against earnings of 48 cents per share for 2009.

The stock is currently trading at an attractive forward price-to-earnings multiple of 5.6, while Simcere Pharmaceutical Group ( SCR), China-Biotics ( CHBT) and American Oriental Bioengineering ( AOB) are trading at PE multiples of 33.0, 8.9, and 9.0, respectively.

All the four analysts covering stock, recommend buying. Analysts polled by Bloomberg foresee the stock gaining around 106% over the next 12 months with a consensus target price of $5.8.

8. Athersys ( ATHX) is a clinical-stage biopharmaceutical company engaged in the discovery and development of therapeutic drugs.

For 2010 fourth quarter, analysts polled by Bloomberg expect the company to report a loss of 18 cents per share, against a loss of 19 cents reported in the quarter-ago period. For full year 2010, the company is seen reporting a loss per share of 68 cents and 59 cents for 2011.

The stock will likely provide an upside of 156% over the next 12 months with a consensus target price of $6.5, according to analysts polled by Bloomberg. Conversely, Celgene ( CELG), Genzyme ( GENZ), Osiris Therapeutics ( OSIR), Arena Pharmaceuticals ( ARNA) and Orexigen Therapeutics ( OREX) are likely to return around 31%, 4%, -15%, -34% and -19%, respectively.

All the four analysts covering the stock recommend buying.

7. SciClone Pharmaceuticals ( SCLN) is a global pharmaceutical company engaged in acquiring, developing and commercializing specialist drugs, including drugs for the treatment of cancer and infectious diseases.

For 2010 fourth quarter, earnings per share were 8 cents, compared to 5 cents per share in the year-ago period. For the full year, earnings per share are forecast at 44 cents for 2010, compared to earnings of 25 cents per share for 2009 and a loss of 18 cents per share for 2008.

The stock is currently trading at an attractive forward price-to-earnings multiple of 8.6. In comparison, Merck, Gilead Sciences ( GILD), Biogen Idec and Par Pharmaceutical ( PRX) have PE multiples of 10.0, 9.7, 11.5, and 12.1, respectively.

All the five analysts covering stock, recommend buying. Analysts polled by Bloomberg anticipate the stock to gain around 49% over the next 12 months with a consensus target price of $6.0.

6. NuPathe ( PATH) is a specialty pharmaceutical company focused on developing and commercializing therapeutics for diseases of the central nervous system, including neurological and psychiatric disorders.

For 2010 fourth quarter, analysts polled by Bloomberg expect the company to report a loss of 46 cents per share, compared to loss of $1.01 reported in the quarter-ago period. For the full year, the company is likely to report loss per share of $3.05 for 2010 and $1.73 for 2011, based on analysts' estimates.

The stock has an implied upside of 90% over the next 12 months with a consensus target price of $14.0, according to analysts polled by Bloomberg. In contrast, Pfizer, Merck, Abbott Laboratories, Mylan, Endo Pharmaceuticals and MAP Pharmaceuticals ( MAPP) are expected to return around 16%, 17%, 23%, 10%, 15% and 36%, respectively.

All the five analysts covering the stock recommend buying.

5. MediciNova ( MNOV) acquires, develops and commercializes low molecular pharmaceutical products.

The company is expected to report a loss of 40 cents per share during 2010 fourth quarter, compared to loss of 49 cents per share and 46 cents per share in the year-ago and quarter-ago periods, respectively, as per Analysts polled by Bloomberg. For the full year, loss per share is forecast at $1.55 cents for 2010 in comparison to loss of $1.68 per share for 2009. Analysts estimate the company to turn profitable in 2011 on earnings of 2 cents per share.

The return-on-equity during the past 12 months has been 25.2%. In comparison, Pfizer, Biogen Idec ( BIIB), Endo Pharmaceuticals ( ENDP) and OXiGENE ( OXGN) have ROEs of 11.7%, 17.2%, 19.7% and -279.7%, respectively.

All the five analysts covering the stock recommend buying and estimate the stock to gain around 143% over the next 12 months with a consensus target price of $12.0.

4. China-based ShangPharma ( SHP) is engaged in pharmaceutical and biotechnology research and development outsourcing.

For full year 2010, the company expects net revenues to reach $89.6-$91.1 million, a 24%-26% year-over-year growth, while GAAP gross profit is expected to register a 24%-28% year-over-year growth rate. Gross margins are anticipated in the range of 34.4%-34.8%, compared to the 33.2% margin reported for 2009, backed by favorable service mix, improved labor cost control, prudent material use and improved operational efficiency.

During the past 12 months, the return-on-equity was 48.7%, surpassing competitors. Covance ( CVD), Pharmaceutical Product Development ( PPDI), Charles River Laboratories ( CRL), ICON plc ( ICLR) and WuXi PharmaTech ( WX) have ROEs of 5.1%, 12.6%, 8.7%, 17.4% and 20.7%, respectively.

The stock is currently trading at a forward price-to-earnings multiple of 14.2. All the 6 analysts covering the stock recommend buying and estimate the stock to gain around 25% over the next 12 months with a consensus target price of $16.3.

3. Alimera Sciences ( ALIM) is a biopharmaceutical company researches, develops, and commercializes prescription ophthalmic pharmaceuticals.

All the six analysts covering the stock recommend buying. In comparison buy ratings for Allergan ( AGN), Regeneron Pharmaceuticals ( REGN), Opko Health ( OPK), QLT ( QLTI), Inspire Pharmaceuticals ( ISPH) and ISTA Pharmaceuticals ( ISTA) are 70%, 64%, 0%, 75%, 11% and 67%, respectively.

Analysts polled by Bloomberg foresee the stock gaining around 25% over the next 12 months at a consensus target price of $12.7.

2. Chelsea Therapeutics International ( CHTP) is a development-stage pharmaceutical company focusing on acquiring, developing and commercializing products for the treatment of several diseases.

Over the past one year, the stock gained around 87%, while Novartis ( NVS), Amgen ( AMGN), Bristol Myers Squibb ( BMY), Mylan and Impax Laboratories ( IPXL) returned around 3%, -6%, 3%, 28% and 74%.

All the six analysts covering the stock recommend buying. Analysts polled by Bloomberg expect the stock to gain around 81% over the next 12 months with a consensus target price of $9.1.

1. OncoGenex Pharmaceuticals ( OGXI) is a biopharmaceutical company engaged in the development and commercialization of cancer therapies.

Analysts polled by Bloomberg expect the company to report a loss of 22 cents per share for 2010 fourth quarter, as opposed to loss of 64 cents per share and $1.08 per share in the year-ago and quarter-ago periods. For full year 2010 analysts expect the company to report a loss of $2.04 per share, but cut losses to $1.77 per share for 2011 and $1.30 per share for 2012.

The stock will likely provide an upside of 147% over the next 12 months with a consensus target price of $39.3, according to analysts polled by Bloomberg. On the other hand, upsides for Teva Pharmaceutical ( TEVA), Dendreon ( DNDN), Exelixis ( EXEL), AVEO Pharmaceuticals ( AVEO) and Cell Therapeutics ( CTIC) are seen at around 19%, 54%, -19%, 31% and 56%, respectively.

All the seven analysts covering the stock recommend buying.

>To see these stocks in action, visit the 10 Pharma Stocks With 100% Buy Ratings portfolio on Stockpickr.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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