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Let’s start with a number: 1,200%.
Sounds unbelievable? Well, that’s the percentage growth Eli Lilly (LLY) has delivered in the last decade.
To put it simply, $1,000 invested in Eli Lilly in 2015 would be worth over $13,000 today. That translates to roughly 30% annual return, making it one of the biggest success stories in the pharmaceutical sector.
The reason? Breakthrough drugs like Mounjaro and Zepbound (for diabetes and weight loss) have positioned Eli Lilly at the forefront of the next big healthcare revolution.
On the other hand, the story for Pfizer (PFE) is very different. Despite its pandemic-driven success with the COVID-19 vaccine, the stock has declined nearly 40% from its peak, as demand for vaccines and antiviral drugs slowed.
Somewhere in between lies AbbVie (ABBV), the company behind Humira, one of the best-selling drugs in history. Despite growing competition, AbbVie remains a strong player due to its diversified drug portfolio and focus on immunology and oncology.
But looking backward only tells part of the story. The real question is: Where should investors put their money in 2025?
The pharmaceutical industry is highly competitive and heavily influenced by regulations, patents, and R&D breakthroughs. While picking individual winners is tricky, investing in high-quality, established pharma stocks can be a smart way to benefit from long-term healthcare trends.
To help you navigate this space, we’ve identified five of the best pharmaceutical stocks for 2025, based on factors like revenue growth, drug pipeline strength, dividend yields, and market positioning.
Breaking Down the 5 of the Best US Pharmaceutical Stocks in 2025
Pharmaceutical companies play a critical role in global healthcare, developing life-saving drugs and treatments. However, not all pharma stocks are equal—some excel in innovation, while others provide steady income through dividends.
Here’s a closer look at the 5 of the top pharmaceutical stocks to consider in 2025:
1. Eli Lilly (LLY) – The Growth Leader
Strategy: Eli Lilly is leading the charge in diabetes, obesity, and Alzheimer’s treatments, making it a top growth pick in the pharma space.
Key Details: [As of Feb 2025]
- Market Cap: ~$820 billion
- Dividend Yield: ~0.8%
- Revenue Growth: 30% year-over-year
- Key Products: Mounjaro, Zepbound, Donanemab
- 5-Year Return: ~500%
Why Choose Eli Lilly?
✅ Massive potential in obesity drugs, an industry projected to be worth $100 billion by 2030.
✅ Strong drug pipeline, including Alzheimer’s treatment Donanemab.
✅ High earnings growth, supported by continued demand for diabetes and weight-loss drugs.
🚨 Consider this: The stock is already expensive, trading at a high P/E ratio (~75x earnings), which means future growth is somewhat priced in.
2. Johnson & Johnson (JNJ) – The Defensive Giant
Strategy: Johnson & Johnson is a diversified healthcare leader, with operations spanning pharmaceuticals, medical devices, and consumer health products.
Key Details: [As of Feb 2025]
- Market Cap: ~$380 billion
- Dividend Yield: ~3.1%
- Revenue Growth: 5-6% YoY
- Key Products: Stelara, Darzalex, Tremfya
- 5-Year Return: ~5%
Why Choose J&J?
✅ A stable, blue-chip stock with a long history of dividend payments and steady growth.
✅ Low volatility, making it a possible safe choice for long-term investors.
✅ Strong oncology and immunology pipeline, ensuring possible future revenue streams.
🚨 Consider this: Growth is slower compared to pure pharma companies, as J&J is also involved in medical devices and consumer products.
3. Pfizer (PFE) – The Comeback Bet
Strategy: Pfizer was the face of COVID-19 vaccines but is now in a post-pandemic reset, focusing on oncology, rare diseases, and mRNA innovations.
Key Details: [As of Feb 2025]
- Market Cap: ~$150 billion
- Dividend Yield: ~6.5%
- Revenue Growth: ~5% year-over-year
- Key Products: Paxlovid, Prevnar, Ibrance
- 5-Year Return: ~(-25%)
Why Choose Pfizer?
✅ Attractive dividend yield (~7%), making it a good choice for income investors.
✅ Cheaper valuation, trading at a low P/E ratio (~18x earnings).
✅ Pipeline recovery in areas like mRNA-based vaccines and oncology.
🚨 Consider this: Revenue has declined sharply post-pandemic, and it may take time for new products to offset those losses.
4. AbbVie (ABBV) – The Cash Flow Generator
Strategy: AbbVie is a cash-flow franchise, with Humira, Skyrizi, and Rinvoq driving its immunology franchise.
Key Details: [As of Feb 2025]
- Market Cap: ~$340 billion
- Dividend Yield: ~3.8%
- Revenue Growth: ~3% YoY
- Key Products: Humira, Rinvoq, Skyrizi, Botox
- 5-Year Return: ~100%
Why Choose AbbVie?
✅ Diversified drug portfolio, reducing dependence on a single blockbuster.
✅ Solid growth in aesthetics (Botox) and neuroscience segments.
🚨 Consider this: Humira sales are declining due to biosimilar competition, but new drugs are offsetting the impact.
5. Merck (MRK) – The Cancer Innovator
Strategy: Merck’s Keytruda (immunotherapy for cancer) is one of the most successful drugs of all time, and its pipeline remains strong.
Key Details: [As of Feb 2025]
- Market Cap: ~$210 billion
- Dividend Yield: ~3.8%
- Revenue Growth: ~5% YoY
- Key Products: Keytruda, Gardasil, Lagevrio
- 5-Year Return: ~10%
Why Choose Merck?
✅ Keytruda is a blockbuster, expected to generate over $30 billion in annual revenue.
✅ Strong focus on oncology, with new immunotherapy combinations in development.
✅ Expanding vaccine business, including HPV and RSV vaccines.
🚨 Consider this: Heavy reliance on Keytruda means any setbacks in cancer treatment advancements could impact growth.
Final Thoughts: Pharma’s Prescription for Long-Term Growth
Pharma’s future lies beyond blockbuster drugs—gene editing, AI-driven drug discovery, and personalized medicine are set to reshape the industry.
- Eli Lilly (LLY) is expanding into Alzheimer’s and RNA-based therapies.
- Johnson & Johnson (JNJ) is investing in robotic surgery and digital health.
- Pfizer (PFE) is leveraging AI to speed up drug development.
- AbbVie (ABBV) is strengthening its oncology and immunology pipeline.
- Merck (MRK) is advancing next-gen immunotherapies and vaccines.
As innovation accelerates, staying ahead of trends is key. Platforms like Vested simplify access to these possibly game-changing pharma stocks, making it easier to invest in the future of healthcare.
