Despite significant progress, cancer continues to be the second-leading cause of death in the U.S. More than 2 million new cases of cancer are likely to be diagnosed in the U.S. this year. More than 618,000 deaths are expected from cancer in 2025.
There's also a huge financial cost that's growing rapidly. In 2020, treating cancer in the U.S. cost roughly $200 billion. By 2030, the total is projected to increase to more than $245 billion.
But with every problem comes an opportunity -- in this case, a massive opportunity to put your dollars to work to help the large and small companies that are developing new ways of diagnosing and treating cancer. Here's what you need to know about some of the leading cancer-focused healthcare stocks that investors should consider.
Top cancer stocks
Cancer stocks include drugmakers that focus on developing cancer therapies and companies that develop products used in screening for cancer. Some of these stocks are highly volatile, such as early-stage biotech stocks. Others, though, are more established and less risky. Here are four top cancer stocks to consider that include both small and large companies:
| Name and ticker | Market cap | Dividend yield | Industry |
|---|---|---|---|
| Guardant Health (NASDAQ:GH) | $8.5 billion | 0.00% | Healthcare Providers and Services |
| Illumina (NASDAQ:ILMN) | $14.9 billion | 0.00% | Life Sciences Tools and Services |
| Pfizer (NYSE:PFE) | $140.5 billion | 6.92% | Pharmaceuticals |
| Summit Therapeutics (NASDAQ:SMMT) | $14.2 billion | 0.00% | Biotechnology |
1. Guardant Health
NASDAQ: GH
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2. Illumina
NASDAQ: ILMN
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NYSE: PFE
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4. Summit Therapeutics
NASDAQ: SMMT
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Unlike Pfizer, Summit Therapeutics doesn't have any approved products on the market. As a clinical-stage biotech company, Summit could be riskier than more established drugmakers.
However, Summit claims one of the most promising candidates in development -- ivonescimab. In May 2024, ivonescimab achieved better progression-free survival in patients with non-small cell lung cancer than Merck's Keytruda in a late-stage study conducted in China. Keytruda was the world's highest-grossing drug in 2024, with sales of nearly $29.5 billion.
In October 2024, Summit completed enrollment in a global phase 3 clinical study evaluating ivonescimab as a second-line treatment for NSCLC. The company is also conducting late-stage studies of the drug as a monotherapy and in combination with chemotherapy as a first-line treatment for NSCLC.
There's no guarantee that ivonescimab will be successful in late-stage studies and win regulatory approvals. If the drug can achieve its potential, though, Summit Therapeutics could be a much bigger company a few years from now.
Why invest in cancer stocks?
The main purpose of investing in any stock is to generate positive returns. Many cancer stocks offer an opportunity to achieve this goal.
Millions of people across the world have cancer. Millions more are diagnosed with cancer each year. Companies that develop effective cancer diagnostic tools and therapies can generate significant revenue and profits. Their stocks can deliver attractive returns over the long term.
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How to evaluate cancer stocks
In many respects, evaluating cancer stocks is no different than evaluating any other stocks. Key factors to consider include financial strength, valuation, and growth prospects.
Examining several key metrics can help you assess the financial strength of a company that develops cancer diagnostic tools or therapies. For example, a return on equity of 15% or more is a good indicator that a company is using shareholder equity to obtain solid returns.
Check out the company's balance sheet. Ideally, it will have relatively low debt. One way to determine whether or not the company's debt is manageable is to review its debt ratio. A lower debt ratio suggests greater financial stability.
Several metrics can help you assess a cancer stock's valuation. The price-to-earnings (P/E) ratio is the most popular valuation metric. Compare a company's price-to-earnings ratio against the earnings multiples of its peers to get a feel for whether it's fairly valued, overvalued, or undervalued.
Determining a cancer stock's growth prospects is probably the most challenging part of the evaluation process. One alternative is to check out Wall Street analysts' growth projections. You could also review the sales growth trends of the company's current products. Look at the sales growth trends of rival products as well.
You'll also want to review the company's development pipeline. Late-stage clinical programs have a higher probability of reaching the market than early-stage programs.
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