After another ugly week in the market, average US stocks are now trading in bear market territory. Of course, this was also the case in 2020, 2018, 2016 and more than a few other periods throughout market history. This is the hardship that has to be taken to achieve great long-term returns on stocks.

While I think there are a lot of long-term buying opportunities being created for stocks in the financial, industrial, and IT sectors, to name a few, I think many investors may be looking toward the more recession-resistant healthcare sector. days for new ideas.

I think the names in the pharmaceutical field are attractive in that they offer generous returns and very reasonable stock market valuations.

2 Pharma Deal

The single-digit P/E-ratio I like is Gilead Sciences

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(GILD), which recently announced that it has entered into agreements with five generic manufacturers to resolve litigation and patent challenges associated with some Gilead treatments containing TAF-based HIV prevention products including Descovy, Vemlidy and Odefsey.

This deal was similar to another deal in 2014 for then-PrEP Truvada and pushed the generic drug threat no later than Halloween 2031 and gave GILD some breathing space to develop a long-acting injection: widely considered the next step for the HIV company franchise.

The news should also reassure income-conscious investors that Gilead’s cash cow has several more years of life, perpetuating what has been a very strong cash flow generation and supporting a 4.7% dividend yield.

But the largest alternative card (and arguably the biggest rise) remains the future of the Gilead Oncology portfolio, with more than $40 billion in purchases over the past five years slow to bear fruit. However, strong performances in Yescarta and Trodelvy (from acquisitions of Kite Pharma in 2017 and Immunomedics in 2020, respectively) remain promising as the former drug is expected to break $1 billion in sales this year and the latter hit the mark by year 2024.

Another company with good dividend yield is Bristol-Myers Squibb

. The stock has outperformed its year-to-date, but still trades for less than 9 times analysts’ consensus forecast for 2023 EPS.

Bristol has a legacy of supporting its pipeline by bringing in partners to share development costs and diversify the risks of clinical and regulatory failure, and the acquisition of Celgene has taken the company into the specialty pharmaceuticals business.

The benefit of this strategy was evident when mixed results were announced earlier this month from a phase II trial that cast a shadow over an experimental blood thinner that many had hoped would prevent secondary strokes. The first-in-class drug, Milvexian, was developed in partnership with Johnson & Johnson's
Janssen unit. Promising data emerged from a 2021 study to reduce blood clots in patients undergoing elective total knee replacement without an increased risk of bleeding. Because it did not meet the end point in the last phase 2 trial, the drug's future is now in question.

On the other hand, BMY partnered with Pfizer in 2007 to develop leading blood-thinning company Eliquis that generates annual revenue of more than $10 billion for Bristol alone.

On the plus side of the latest ledger, BMY received FDA approval for the related cancer and heart failure drugs Opdualag and Camzyos last April, to align with new approvals in March for the current drug Opdivo. These are powerful steps not only to offset losses from the multiple myeloma drug Revlimid, which lost patent protection as of this year, but to continue top-line growth.

It announced last Monday that the US Food and Drug Administration had approved its drug Sotyktu (deucravacitinib) to treat moderate to severe psoriasis, while Street analysts were quick to note the absence of a black box warning, which is notable given safety concerns. I've had other autoimmune medications.

Bristol has a deep pipeline of potential products with more than 50 compounds in development across 40+ satisfying regions, and investors should like the 3.1% dividend yield and inexpensive share price while waiting for new blockbusters to come out.