This list is a snapshot of the best healthcare stocks for an entire decade, from 2010 to 2020. As such, some magnificent stocks are excluded, simply because of the measurement period. For instance, Axsome Therapeutics had an amazing 3,578% return in 2019. And yet Axsome's fantastic 2019 return was predicated on an investor buying at the bottom in January. Measured from its IPO price at $9 a share, Axsome was a 10-bagger for the decade. That's a good return, of course, but not impressive enough to make this list.
Our top 10 is filled with medical device makers and companies that are providing services to the healthcare industry. Only three drug companies made it to the top. If you invested $1,000 in each of these 10 companies on Jan. 4, 2010, 10 years later your portfolio would be worth $247,607. And here are the mightiest healthcare stocks over the last decade.
10. Jazz Pharmaceuticals (up 1,699%)
Jazz Pharmaceuticals (NASDAQ:JAZZ) is an Irish biotech company that focuses on drugs for sleep disorders, as well as oncology/hematology and other unmet medical needs. Its marketed products include Xyrem for excessive daytime sleepiness, as well as Erwinaze and Vyxeos for leukemia. It also has drugs for sleep apnea and Parkinson's disease in its pipeline. The $8 billion biotech is highly profitable, with margins of 29%.
9. Abiomed (up 1,782%)
Abiomed (NASDAQ:ABMD) was $8.86 a share at the open on Jan. 4, 2010. Fast forward a decade, and on Jan. 3, 2020, the stock was trading for $166.82 a share. (And it's down 47% off its highs!) So that's a fantastic return for long-term shareholders. It's almost a 19-bagger. Abiomed is a medical device company focused on creating artificial pumps for failing hearts. Its major device, the Impella, is a micro-pump that can replace heart function for six hours.
8. NeoGenomics (up 1,790%)
NeoGenomics (NASDAQ:NEO) was trading for $1.55 at the beginning of the decade. Ten years later, its shares are trading hands for $29.31. The company specializes in running advanced genomics tests for hospitals and doctors in the oncology space. It's a $3 billion small-cap. In its most recent quarter, Neo grew revenues at 50% year over year. (Some of that growth was due to its acquisition of Genoptix in Dec. 2018).
7. Accelerate Diagnostics (up 1,813%)
Accelerate Diagnostics (NASDAQ:AXDX) was a penny stock ten years ago, trading for $0.89 a share. Investors who put in $1,000 at the beginning of the decade (1,123 shares) are sitting on $19,124 now. (Let your winners run!) Accelerate is a medical device company that specializes in infectious diseases. Its devices help doctors quickly determine if a patient has been exposed to a deadly bacteria or fungus. The company's not profitable yet, but revenues increased 68% in the most recent quarter.
6. Simulations Plus (up 2,001%)
Simulations Plus (NASDAQ:SLP) was a tiny micro-cap ten years ago. Today it's worth $500 million. The company provides simulation software and services to drug companies to help with drug discovery and development. Using the company's software, scientists can simulate in vitro experiments over many molecules at once. The software will predict various properties of molecules, including absorption rates and interactions with other drugs. Simulations Plus has 25% profit margins and revenue growth of 20% in its most recent quarter.
5. Repligen (up 2,123%)
Repligen (NASDAQ:RGEN) is a bioprocess developer with a market cap of almost $5 billion. Repligen is a picks-and-shovels play on the rise of biotechnology. Instead of taking the risks of drug discovery and drug failure, you can invest in Repligen, a company that provides equipment to a multitude of companies so that biologic drugs can be manufactured. Repligen has an estimated 95% market share in producing the proteins that go into vaccines and gene therapy.
4. DexCom (up 2,563%)
DexCom (NASDAQ:DXCM) is now a massive $20 billion healthcare company. But 10 years ago, it was a tiny medical device company. DexCom specializes in continuous glucose monitoring (CGM) systems for people with diabetes. Right now the company is in a hot competition with Abbott Labs in the CGM market. The company's recently achieved profitability and its top-line growth is still blistering at 49% year over year.
3. Exact Sciences (up 2,612%)
Exact Sciences (NASDAQ:EXAS) is a large-cap ($14 billion) company focused on molecular diagnostics for oncology. The company's main product is Cologuard, a non-invasive DNA screening test taken from a stool sample. Profitability is still elusive but the company has fantastic top-line growth. Revenues are up 85% year over year. And profitability is definitely in the cards as the company has 80% gross margins on a pro forma basis.
2. ACADIA Pharmaceuticals (up 2,956%)
ACADIA Pharmaceuticals (NASDAQ:ACAD) is a biotech that is focused on disorders of the central nervous system. Its leading pharmaceutical is Nuplazid, which is used to treat hallucinations and delusions caused by Parkinson's. The company hopes to expand the label to include other forms of dementia.
1. Neurocrine Biosciences (up 3,863%)
Neurocrine Biosciences (NASDAQ:NBIX) is the top healthcare stock over the last decade. Investors who bought 361 shares at $2.77 a share are now sitting on almost $40,000. The $10 billion biotech has two drugs on the market: Ingrezza, a drug for involuntary muscle movement, and Orilissa, a hormone therapy for women's health.
|Company||Price Jan. 4, 2010||Price Jan. 3, 2020||Percentage Gain|
It's been a pretty amazing decade for healthcare stocks. Many of these names came out of nowhere to give astounding returns to the investors who bought and held them. And despite these very large returns, many of these stocks are still attractive going forward. My favorite is Accelerate Diagnostics, but I think several of these names will easily defeat the S&P 500 over the next decade.