Biotechnology investors have two pharmaceutical stocks to consider buying. One already broke out last August. The other is hesitant to rally.
Lilly (LLY) broke out after posting its earnings report in August 2026. It rose from the low $600s to a bearish “multiple top” pattern at $1,100. Despite the pull-back risks, Lilly is fundamentally strong.
In the fourth quarter, it earned $7.54 in EPS. Revenue jumped by 42.6% Y/Y to $19.29 billion. For 2026, revenue is in the range of $80 billion to $83 billion. Those incredible results suggest that LLY stock could jump back to all-time highs.
Novo Nordisk (NVO) looked like it would rise further from the recent breakout to above $60. However, the stock fell to the low $40 range before closing at nearly $48.
Hims & Hers Health (HIMS) said it would offer a low-cost compounded version of Novo’s Wegovy pill. The bad news for HIMS stock is that the FDA Commissioner said last week that it would take action against firms like that. Marty Makary said that it is acting on companies that mass-market illegal copycat drugs. That swift action is rewarding short-sellers betting against HIMS stock. The short interest is 33%.
On the weekend, HIMS posted on X that “since launching the compounded semaglutide pill on our platform, we’ve had constructive conversations with stakeholders across the industry.” Asa result, it said that it would stop offering Wegovy pills.
The stock dropped by over 15% to trade at around $19.50.
Your Takeaway
Novo shares do not have much downside at these levels. Its P/E of below a 14 times multiple is far cheaper than other drug firms. Pfizer (PFE) has a 20x P/E, and J&J (JNJ) trades at a 22x P/E.
Lilly stock is a hold.
Investors should be wary of holding HIMS stock.
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