3 Drug Stocks to Buy at a Discount

The pharmaceutical industry is highly technical, and significant developments can rapidly transform the sector. For instance, Novo Nordisk 's ( NVO 0.30%) introduction of GLP-1 weight loss drugs was a huge development. Eli Lilly ( LLY +0.07%) introduced more attractive GLP-1 drugs, however, leading to Novo Nordisk losing its early lead in the weight loss niche. More change is on the way, including from Novo Nordisk, but if you have a contrarian bent, you might prefer out-of-favor drug makers Bristol Myers Squibb ( BMY 0.05%), Merck ( MRK +0.34%), and Pfizer ( PFE +0.24%). The latest news on GLP-1 drugs says a lot Novo Nordisk kick-started the GLP-1 market in a big way. Eli Lilly entered the market with GLP-1 shots that were more attractive. This illustrates how rapidly the pharmaceutical sector can evolve. But the change isn't over yet, with Novo Nordisk just receiving approval to sell a GLP-1 pill. Image source: Getty Images. Not surprisingly, many consumers prefer to take a pill over using a shot. Novo Nordisk's stock jumped on the news of its GLP-1 pill, which is also not a surprise. The pill, which is expected to launch in early 2026, could put the company at the forefront of the pharmaceutical sector once again. Innovation and intense competition are actually normal for drug makers. The interesting thing is that there are a handful of large and established drug companies that have proven they know how to survive in the industry. They go in and out of favor on Wall Street based on the current roster of drugs they possess, the timing of patent losses on key drugs (also known as a patent cliff ), and the quality of the pipeline of the drugs they have in development. Novo Nordisk, even after the price spike following the approval of its GLP-1 pill, remains down by more than 50% from its high-water mark. Investors might want to look at the discounted shares. But the good news is already out, so if you are a true contrarian , you might be a bit late to the show. There are other options. NYSE: NVO Key Data Points Bristol Myers Squibb, Merck, and Pfizer Pfizer is probably the riskiest option right now, given that its lofty 6.8% dividend yield makes it appear to be an attractive dividend stock. However, the payout ratio is above 100% at the moment, so income investors should go in with a bit of caution. The company is probably best viewed as a turnaround story. NYSE: PFE Key Data Points Essentially, Pfizer's own GLP-1 drug candidate didn't pan out. It has a patent cliff approaching on another drug, so this was a significant setback. The company has moved quickly to shore up its drug pipeline, acquiring a company with a promising GLP-1 candidate and partnering with a Chinese company to distribute its GLP-1 drug, pending regulatory approval. In the meantime, Pfizer's shares are down more than 50% from their high-water mark. Bristol Myers Squibb is an interesting...

Preview: ~500 words