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News out of the medical world is making pharmaceutical companies some of the best stocks to buy today. New drugs, treatments, equipment, and other advances are constantly hitting the market, while the healthcare sector is growing as a whole.
For instance, San Francisco-based market research firm ArcView Group estimates the national legal marijuana market at $1.53 billion in 2013, and expects sales to nearly double to $2.57 billion by the end of this year.
Money Morning Defense & Tech Specialist Michael A. Robinson lives ten minutes from the epicenter of the medical marijuana movement in northern California and is inundated with cannabinoid drug stock news on a daily basis.
"Clearly, the industry is growing rapidly, and there's big money to be made… especially if you hear about its best profit play," Robinson said last week.
Meanwhile, Money Morning BioScience Investment Specialist Ernie Tremblay is watching a company with no fewer than six drugs in clinical development to treat seven different diseases.
"The pipeline, of course, is just the first reason this is one of the companies I'm watching so closely," Tremblay said in March.
The key for investors is snagging the best healthcare industry stocks before they soar, to lock in the biggest gains.
Based on their observations in the sector, Robinson and Tremblay gave readers two pharmaceutical picks to get them started with some of the best stocks to buy today…
Best Stocks to Buy Today: Two Pharmaceutical Picks
GW Pharmaceuticals was founded in 1998 and is based in the United Kingdom. It's the global leader in the development of plant-based cannabinoid therapeutics.
The company has partnered with some of the world's largest publicly traded drug firms and stands to gain more than $300 million in revenues from those alliances alone.
And better yet, it is a big play on the cannabis industry because of the company's robust pipeline that includes several drugs that utilize the science behind cannabinoids. GW Pharmaceuticals is focused on the huge potential behind the more than 65 types of these cannabinoid compounds already discovered.
Sativex is a very popular product of the company, and is widely circulated in a number of European countries. The drug has awesome potential to treat patients with pain from cancer as well as those with a condition known as MS spasticity, which results in muscle spasms and stiffness associated with the diseases multiple sclerosis. Sativex treats these conditions by allowing tetrahydrocannabinol (THC), cannabidiol (CBD), and a naturally occurring chemical called anandamide to bind to receptors in the brain.
What's more, while Sativex is still in phase 3 clinical trials for approval by the FDA, it is already approved in 25 countries overseas.
As far as new drugs in development, GW recently started Phase II trials for two different drugs that treat diabetes and schizophrenia respectively and so far has reported "no hiccups." Besides these two, there are a number of drugs also in GW's pipeline.
With a stable management team and high price-to-earnings (P/E) ratio, GW Pharmaceuticals is a safe bet for investors. GWPH's steady increase of earnings per share (EPS) since 2012 is also a good sign the company is innovating at a solid pace.
"With a $1 billion market cap, the stock trades at roughly $66 a share – I'd like to see stronger financials, but that's almost always true of biotech firms that still have several clinical trials to complete before all their products are on the market," Robinson said. "With its solid science, multiple uses for its main cannabis-based biotech product, and strong alliances with global drug leaders, GW Pharmaceuticals should leave investors richly rewarded."
GWHP stock currently sits at $49.97 per share, and is up 20.29% so far in 2014.
Omeros Corp. (Nasdaq: OMER)
Omeros is a biopharmaceutical company with an impeccable reputation.
"The company has no fewer than six drugs in clinical development to treat seven diseases," Tremblay said. "Some have already moved up the regulatory gauntlet – the ladder of the sacred catalysts – but I'm still seeing 18 opportunities, at the very minimum, for an investor to watch his money soar."
Omeros' pipeline includes drugs to treat schizophrenia and Huntington's disease, as well as opioid and nicotine addiction, and drugs that can actually limit the damage of various types of surgery before it ever happens. With one drug at the Phase III stage and four drugs in Phase II stage, OMER is a company to watch out for.
"Omeros had about 26 months' worth of cash in its coffers as of the end of the Q3 2013 and a burn rate of about $395,000 per month," Tremblay said. "Financially, the company is strong, with plenty of cash on hand to get its lead drug to market and its other pipeline drugs further up the ladder."
Omeros has a market cap of $389.6 million. Its stock currently sits at $11.09 per share, and has exploded 176% since this time last year. OMER is one of the best stocks to buy today for long-term investors.