8 min read 

Last year, the world economy entered the recovery stage. Historically, the health sector doesn’t grow much during such periods — but not in 2021 with its never-ending Covid concerns. The volume of deals in the healthcare sector was 27.8% higher than pre-pandemic levels, and pharma stocks on the IQ Option platform showed a cumulative rise of 7.47%.

Let’s look back at the past year and recall the key events in the pharmaceutical industry, trends, and top performers. 

Pharma industry outlook 2021

Unsurprisingly, the healthcare sector is making billions of dollars thanks to the Covid crisis. Vaccine manufacturers became the main beneficiaries of the pandemic, with other healthcare players hovering over their shoulder: pharmacies, equipment manufacturers, IT companies specializing in the development of medical software, etc. The balance of power in the industry can be tracked in the historical data video below.

Pharmaceutical stocks historical data overview, 2020-2021

As you can see, the race was pretty intense. Let’s take a look at the most important events that shaped the development of the healthcare industry and the best pharma stocks to watch during the second year of the pandemic.

1. Coronavirus vaccine development

The invention of the Covid vaccine was the most anticipated event in the world. Dozens of companies from different countries entered the race, presenting their versions of the drug to stop the pandemic. The worldwide march toward mass vaccination created a huge market for COVID-19 vaccines and drugs, fueled by government, non-profit organizations, and investor money — over $26 billion in total

As a result, the WHO recognized the vaccines by Pfizer / BioNTech, Moderna, AstraZeneca, Johnson & Johnson, Sinopharm, and Sinovac. By the end of 2021, almost 9 billion shots were given, bringing the frontrunner manufacturers a whopping profit of $1,000 per second

Top Covid-19 vaccine stocks*

BioNTech SE ADR BNTX

+223.99%1Y change
Pfizer, Inc. PFE

+31.75%1Y change
AstraZeneca PLC ADR AZN

+7.54%1Y change

2. Rise of the Delta and Omicron variants

In April, the new highly contagious Delta variant started spreading across the globe, causing new lockdowns and bringing in new challenges. 

In November 2021, the new Omicron variant of the virus was discovered. Its protein was significantly different from that of the original coronavirus which vaccines are based on. This has raised concerns about the effectiveness of existing vaccines, sparked a global panic, and caused the biggest stock market drop in more than a year. The long-awaited “return to normal” was again postponed — booster shots, rapid tests, masks, and other related measures remained integral to daily life.

Health organizations needed to keep up with the drug supply to meet global demand. In addition, the coronavirus has made people more attentive to their general health — not only in treatment but also in preventive measures. As a result, many investors have found value in drug manufacturing companies, which value had been increasing in 2021.

Top drug manufacturer stocks

Eli Lilly and Company LLY

+68.24%1Y change
Merck KGaA MRCG

+57.62%1Y change
Regeneron Pharmaceuticals, Inc. REGN

+27.22%1Y change
Gilead Sciences, Inc. GILD

+14.17%1Y change
AbbVie Inc. ABBV

+12.76%1Y change
Johnson & Johnson JNJ

+6.36%1Y change

Top medical equipment stocks

Danaher Corporation DHR

+38.59%1Y change
Abbott Laboratories ABT

+23.39%1Y change
Align Technology, Inc. ALGN

+22.12%1Y change

3. Digitization of healthcare

The pandemic caused the health sector to face a big data tsunami. Medical records of millions of people, operational connections between labs, hospitals, and regulatory agencies, numerous tests data, and quality benchmarks all had to be processed quickly and efficiently. As a result, medical organizations had to learn to optimize their data and information management processes in order to survive.

So, many life science organizations began to actively cooperate with Medtech companies. For example, AI-driven drug development platforms, quality management software, cloud-based global standardization tools are gaining popularity.

Top healthcare technology stocks

Quest Diagnostics Incorporated DGX

+27.88%1Y change
ANSYS, Inc. ANSS

+13.85%1Y change
CVS Health Corporation CVS

+25.97%1Y change

What’s up for 2022?

Heavy vaccination in 2021 is expected to significantly reduce COVID-19 treatment sales in 2022 and 2023. However, demand is likely to remain high due to:

  • Most of the world’s population remaining unvaxed;
  • FDA authorizations of vaccines for children;
  • Booster shots for adults;
  • Vaccination passports adoption in some countries allowing those who have been vaccinated the ability to travel — and excluding those who haven’t; 
  • Possibility of the compulsory Covid jabs. 

Among the trends for the new year, experts mention the rise of retail pharmacy chains, virtual healthcare, and patient journey automation. This may arouse investor interest in virtual care providers and companies that develop digital medical assistants and apps.

Conclusion

Pfizer, BioNTech, AstraZeneca, and other vaccine manufacturers were in the top pharma stocks to invest in in 2021. Manufacturers of concomitant drugs, medical equipment, and accessories also showed good growth last year. The need to process a huge amount of data has spurred IT companies that produce software for medical institutions.

In 2022, the industry is expected to decline, although Big Pharma is unlikely to slow down to pre-pandemic levels in the near future.

*Please note that past performance is not an indication of future performance.

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