NEW YORK ( TheStreet) -- Gentium ( GENT), Concord Medical Services ( CCM), Nektar Therapeutics ( NKTR), Dendreon ( DNDN), ShangPharma ( SHP), Teva Pharmaceutical ( TEVA), WuXi PharmaTech ( WX), Elan ( ELN), Celgene ( CELG), and Par Pharmaceutical ( PRX) are expected to return up to 72%, based on their respective 12-month price targets.

Health care stocks had underperformed in the last one year due to uncertainty over the federal health care policy and ailing European economies. In the last one year, while the S&P 500 INDEX returned 11%, the S&P Global Health Care Sect. (ETF) notched up only 5.6%. However, 2011 is shaping up well, as the health care sector tracked broader indices rising 6% since the start of the year compared to 5.6% for the broader index. The proposed health care spending cuts announced by Barak Obama during the week did not weigh heavily on the sector. Relatively lower volatility of stock performance compared to broader indices and a pick-up in M&A activity in the sector augurs well for the sector.

Going ahead, the global health care market could get a boost on growing medical expenditure in emerging countries. Rising income levels and improved growth rates could increase public and private spending on health care. The demand for high-technology medical devices will likely expand going forward, benefiting the relevant U.S. companies. An aging population and public health insurance could sustain demand in the developed countries.

We have identified 10 stocks which, according to analysts, could outperform their peers and broader market indices. These stocks have an upside potential of 20% to 72% with a mean upside value of around 40% and average buy ratings of 80%.

In comparison, pharma giants Johnson & Johnson ( JNJ), Pfizer ( PFE), Merck ( MRK), Abbott Laboratories ( ABT), Bristol Myers Squibb ( BMY) and Eli Lilly ( LLY) have upsides of -2% to 14%, according to analysts' estimates.

10. Par Pharmaceutical ( PRX) is a U.S.-based specialty pharmaceutical company engaged in developing, licensing, and manufacturing generic and branded drugs.

Net revenue for 2010 fourth quarter was $227 million, compared to $290.3 million in 2009 as competition increased in products like metoprolol, meclizine, and clonidine.

However, gross margin for the fourth quarter increased 42% from 31.5% in the prior year quarter with the launch of hydrocodone polistirex, omeprazole, and diazepam, as well as increases in other generic products. However, these gains were partially offset by lower sales of meclizine, clonidine, and metroprolol and impact of the U.S. health care reforms rolled out in 2010.

Par Pharmaceutical along with third-party partners has approximately 29 Abbreviated New Drug Applications pending with the Federal Drug Agency, 11 of which are expected to be first-to-file opportunities with a brand value of approximately $8 billion. Analysts expect the stock to deliver 21% return in the next one year. The stock is currently trading at 10.4 times its estimated 2011 earnings.

9. Celgene ( CELG) is a biopharmaceutical company engaged in the discovery, development, and commercialization of novel therapies for the treatment of cancer and inflammatory diseases through gene and protein regulation.

Higher sales of Revlimid improved 2010 fourth quarter revenue by 38% to $1.05 billion. Net income for the quarter was reported at $347.6 million, compared to $290.3 million in 2009

For full year 2010, revenue increased 34% to $3.6 billion. Net Income stood at $1.31 billion, compared to $971 million in 2009.

The company has $2.6 billion worth cash, cash equivalents, and marketable securities. As per Bloomberg consensus, of the 34 analysts covering the stock, 24 rate a buy and 10 maintain a hold on the stock. Analysts expect the stock to deliver 22% in the next one year. The stock is trading at 16.3 times its estimated 2011 earnings.

8. Elan ( ELN) is a biotechnology company engaged in developing therapies for neuroscience, autoimmune and chronic pain disorders. The company has two business units: BioNeurology and Elan Drug Technologies.

Net revenue for full year 2010 increased 5% to $1.17 billion from $1.11 billion in 2009. Revenue from the BioNeurology business increased 7%, while revenue from EDT business came in lower than 2009.

Net revenue for fourth quarter of 2010 increased to $309 million, up 3% from the same period in 2009. Revenue from the BioNeurology business fell slightly, while revenue from the EDT business improved 15%.

Revenue increase for full year and fourth quarter of 2010 was primarily due to growth in Tysabri and the launch of Ampyra, which more than offset the expected decline in revenue from Maxipime, Azactam, Skelaxin, and Prialt.

The company generated cash during every quarter of 2010 and reduced debt by 17% in the same period. Analysts expect the stock to deliver 23% return in the next one year.

7. WuXi PharmaTech ( WX) is a research and development outsourcing company serving the pharmaceutical, biotechnology, and medical device industries, with operations in China and the U.S.

Revenue for 2010 fourth quarter increased to $88.6 million, up 20% compared to same period in 2009 due to improved manufacturing services segment net revenue. Fourth-quarter gross margin decreased year-over-year to 38.5% from 39.6% due to business mix.

Revenue for full year 2010 increased 24% to $334 million. Gross margin declined 38.2% from 40.1% in 2009, driven by higher revenue growth from the lower margin manufacturing services and lower margins in laboratory services segment. Net income for full year 2010 grew 70% to $91 million.

The company's CEO, Dr. Ge Li, said, "We expect 2011 to be another strong year for WuXi, with revenue growth of 17-21% and stable margins despite an environment of Yuan appreciation and labor cost inflation in China. WuXi is rapidly expanding its new Laboratory Services businesses and will reap the benefits of years of hard work in research manufacturing with revenue growth in our new commercial manufacturing business." The stock is trading at 14.5 times its estimated 2011 earnings.

6. Teva Pharmaceutical ( TEVA) is an Israel-based pharmaceutical company engaged in the development, manufacture, and marketing of generic drugs, specialty pharmaceuticals and active pharmaceutical ingredients. The company is the largest generic drug maker in the world with a global product portfolio of more than 1,250 molecules focused on neurological, respiratory and women's health therapeutics as well as biologics.

Net revenue for 2010 fourth quarter was $4.4 billion, growing 16% from the corresponding period in 2009. For full year 2010, net revenue rose 16% from 2009 to $16.1 billion.

Gross profit margin during 2010 fourth quarter was 55.8%, improving 60 basis points from the year-ago quarter. Net income earned during the quarter was $771 million, compared to $379 million in fourth quarter of 2009. Net income for fiscal 2010 was $3.3 billion, up 67% from 2009.

Analysts expect the stock to deliver 30% return in the next one year with 79% analyst buy ratings. The stock is trading at 9.7 times its estimated 2011 earnings.

5. ShangPharma ( SHP) is a leading China-based pharmaceutical and biotechnology research and development outsourcing company.

Net revenue for fiscal 2010 was $90.3 million, increasing 25% from 2009 due to a larger customer base, higher business volumes from the company's top customers, expanded service offering, and favorable shift in service mix. Net income was $13 million, rising 33% from $9.8 million in 2009.

Average revenue per customer for the top 10 customers increased to $5.7 million, compared with $4.7 million in 2009. Total number of customers rose to 237 from 134 in 2009. Gross margin was 33.4%, up from 33% in 2009.

During the recent quarter, net revenue increased 29.4% year-over-year to $25.6 million in December. Gross profit improved 28.1% year-over-year to $8.3 million. Gross margin was 32.3%, narrowing 30 basis points from 2009 fourth quarter. Analysts expect the stock to deliver 38% return in the next one year. The stock is trading at 11.9 times its estimated 2011 earnings.

4. Dendreon ( DNDN) is a biotechnology company focused on the discovery, development, and manufacture of cancer therapeutics.

Revenue for fiscal year 2010 was $48.1 million compared to $0.1 million in 2009. Revenue for fourth quarter of 2010 was $25 million, compared to $21,000 during the same quarter in 2009.

The company is seeking license for 36 workstations to manufacture Provenge (sipuleucel-T) in its facilities at New Jersey and Los Angeles.

Dendreon management indicated that the company had $277.3 million in cash, cash equivalents, and short-term and long-term investments at the end of December 2010, compared to $606.4 million during the same period of 2009.

The stock has delivered 11% since the start of 2011. As per Bloomberg consensus, of the 20 analysts covering the stock, 15 rated a buy and four maintained a hold on the stock. Analysts expect the stock to deliver 45% in the next one year.

3. Nektar Therapeutics ( NKTR) is U.S.-based biopharmaceutical company developing novel therapeutics in oncology, pain and other areas. Nektar has an exclusive worldwide license agreement with AstraZeneca for its oral NKTR-118 and NKTR-119 program for pain therapy.

Revenue for the fourth quarter of 2010 increased to $45.3 from $39 million in same period of 2009. Revenue for full year 2010 was reported at $159 million as compared to $71.9 million in 2009 due to amortization of a $125 million milestone payment received from AstraZeneca for NKTR-118.

Operating costs in the fourth quarter of 2010 grew to $66 million from $45 million in the same period of 2009 on higher research and development expenses and addition of impairment charge of $12.5 million during the quarter.

On molecule development and progress, Howard W. Robin, Nektar's CEO, said, "Our lead oncology program, NKTR-102, demonstrated positive results in Phase 2 studies and we plan to move into Phase 3 in 2011. Nektar's research pipeline is on track to deliver one new clinical candidate each year, and we are looking forward to starting Phase 1 clinical studies of NKTR-181, our novel opioid analgesic, this month."

2. Concord Medical Services ( CCM) operates the largest network of radiotherapy and diagnostic imaging centers in China.

Net revenue during fourth quarter of 2010 was $17.1 million, increasing 30.1% from the corresponding period in 2009. Net revenue for full year 2010 was $59.0 million, up 33.2% compared to 2009.

Gross profit during 2010 fourth quarter was $12.4 million, increasing 32% from the same period in 2009. Gross profit for fiscal 2010 stood at $40.4 million, up 30% from 2009. Net income during fourth quarter of 2010 was $6.6 million, advancing 21.8% compared to same period in 2009. Net income for FY 2010 was $19.8 million, growing 4.9% from 2009.

The company added 33 new centers during the year, taking the existing network count to 119. Concord intends to operate 200 centers by 2012 end. The stock is expected to gain 63% in the next one year with analyst buy ratings of 86%. The stock is trading at 14 times its estimated 2011 earnings.

1. Gentium ( GENT) is an Italy-based biopharmaceutical company focused on the development and manufacture of drugs candidates to treat several diseases, including vascular diseases related to cancer and cancer treatment. The company develops and manufactures defibrotide, an investigational drug that has been granted Orphan Drug status by the U.S. Food and Drug Administration.

The company's total revenue doubled to $33 million in 2010. Product sales boosted from increased distribution of defibrotide. Net income for 2010 stood at $5.4 million, the company's first profitability for the full year.

During 2010, the company conducted several pre-clinical and clinical studies as mandated by regulatory authorities and expanded its existing license agreement with Sigma Tau by paying an upfront fee of $7 million. The company increased the uptake of defibrotide worldwide from 100 clinics to more than 240 in over 33 countries.

The management expects the company to be cash positive in 2011, with product revenue in the range of $30 to $35 million. The company's stock doubled during the last one year and analysts expect the stock to deliver 72% return in the next one year. The stock is trading at 11 times its estimated 2011 earnings.

>>To see these stocks in action, visit the 10 Health Care Stocks With Upside portfolio on Stockpickr.