During good times, pharma stocks are often great buys thanks to their steady cash flow, high-profit margins, dedication to research and development, and market exclusivity from drug patents. In a global pandemic, however, pharma companies become even better buys, because of the essential nature of their business.

Steady demand for prescription drugs is why investors look to the sector for stocks that are recession-proof and COVID-19-proof. Let's take a look at two stocks that fit this category and why you should consider holding them for the long term.

Group of scientists working at the laboratory.

Image Source: Getty Images.

A large-cap pharma that's growing in all directions

In Q2 2020, sales of Regeneron Pharmaceuticals' (NASDAQ:REGN) widely popular eye injection, Eylea, amounted to $1.8 billion. The drug treats a variety of diseases in the retina, and demand is approaching pre-COVID-19 levels.

While Eylea rebounds, the rest of the company's portfolio has been expanding. Sales of Dupixent, an anti-inflammatory drug, increased by 70% year over year to nearly $1 billion during the quarter. The drug is 70% effective at relieving symptoms of specific allergies.

The company's skin cancer therapy, Libtayo, has also been on a tear, bringing in quarterly revenues of $80 million. Regeneron is seeking approval with the U.S. Food and Drug Administration (FDA) to expand Libtayo's label to treat various types of lung and skin cancer. The drug is three times more effective than other standard-of-care drugs at treating certain types of cancer, and has a $25 billion market opportunity.

Currently, Regeneron has about $5.7 billion in cash and investments and $1.5 billion in liabilities from debt financing, making its financial situation superb. In fact, the company recently bought out Sanofi's entire stake for $5 billion, putting more future net income into Regeneron shareholders' hands. Investors should feel confident about the company's future potential as it reinvests more than $2 billion annually into research and development programs to keep its momentum going.

And in addition to Regeneron, I think there's another company in the sector that investors will not want to miss.

Family doctor giving to patient dropper jar of cannabis concentrate oil during consultation.

Image Source: Getty Images.

Don't miss out on this cannabinoid drug company

Next up, we have a company that's revolutionizing the way to treat seizures. The drug in play is Epidiolex, which is manufactured by GW Pharmaceuticals (NASDAQ:GWPH) and is the first FDA-approved drug that derives its active pharmaceutical ingredient from marijuana.

Epidiolex can treat two rare forms of epilepsy, with clinical studies showing up to a 48% reduction in the number of seizures. Recently, the drug has also received regulatory label expansion to treat tuberous sclerosis, a disease causing tumors that affects 50,000 patients in the U.S. alone.

If three indications weren't enough, the active ingredient used in Epidiolex is also under investigation for the treatment of multiple sclerosis and post-traumatic stress disorder. The company expects various phases 2/3 clinical studies for these conditions to commence in the first half of next year.

The good news doesn't stop from here. Epidiolex is now approved to treat its indications in Europe, as well. In Q2 2020, sales of Epidiolex outside the U.S. amounted to $17 million. The drug generated $121.3 million in revenue for GW Pharmaceuticals in the quarter, representing 68.4% year-over-year growth, compared with Q1 2019.

While its sales grew, the company's net losses narrowed. As of June 30, operating cash use per quarter was $34.3 million, a huge decrease from the $89.9 million it spent in the same period last year. The company has no debt and over $477 million in cash on its balance sheet.

Furthermore, the vast majority of patents for Epidiolex do not expire until 2035, giving the company about 15 years to capture the global anti-seizure market before generic competition enters. The company fully expects it can grow Epidiolex into a blockbuster brand. Hence, I think GW Pharmaceuticals is a fantastic growth stock to add to investors' portfolios.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.