11 Most Undervalued Pharma Stocks to Invest In

In this article, we will be taking a look at the 11 Most Undervalued Pharma Stocks to Invest In.

Haig Bathgate, CEO of Callanish Capital, stated on CNBC on May 7 that he is confident about global stocks despite worries over the Iran war. He clarified that while geopolitical crises typically cause short-term volatility motivated by emotional responses, their long-term effects on stocks have historically been minimal. According to him, investors frequently overreact during uncertain times and fail to recognize the fundamental factors that actually influence markets. He identified the main long-term drivers as capital expenditure cycles, global energy dynamics, and the quick development of artificial intelligence. In view of the continued momentum in U.S. stocks near the close of the previous year, he emphasized that while conflicts can temporarily disrupt some businesses, they do not alter the general direction of markets.

Speaking on CNBC’s “Closing Bell” on March 24, Scott Chronert of Citi provided a more nuanced viewpoint influenced by macroeconomic and geopolitical circumstances. He described two opposing stories that affect investor behavior. As tensions surrounding the Iran crisis increased over the previous three weeks, short-term positioning had become more defensive, and expectations for volatility had increased. Improved mood in stocks and other riskier assets, however, has been bolstered more recently by the reduction of hostilities. He emphasized how challenging the intermediate prediction is and how much it depends on problems with general liquidity, interest rates, oil prices, and currency volatility. As the fiscal Q1 earnings season approaches, these factors are expected to have a major influence on investment decisions and business fundamentals. While short-term relief rallies are possible, he stressed that longer-term direction ultimately depends on macroeconomic confirmation, structural growth, policy signals, and profitability trends.

When these perspectives are taken as a whole, they highlight the continuous conflict between long-term fundamental market dynamics and immediate geopolitical shocks. Investors’ major concerns continue to be earnings visibility, liquidity difficulties, and recurring themes like innovation, productivity growth, and the global energy shift, even while events like the Iran crisis can quickly affect sentiment and produce volatility. In this case, geopolitical events often influence timing and mood, but long-term market direction is still determined by fundamentals.

With that said, let’s take a look at the most undervalued stocks.

Our Methodology

For our methodology, we screened pharmaceutical stocks with a price-to-earnings (P/E) ratio of 20 or below. From this universe, we selected the top 11 stocks based on the latest news and recent developments, and then ranked them in descending order according to their P/E ratios.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).

Here is our list of the 11 most undervalued pharma stocks to invest in.

11. Pfizer Inc. (NYSE:PFE)

PE Ratio: 19.95

Pfizer Inc. (NYSE:PFE) is one of the most undervalued stocks on this list.

TheFly reported on May 27 that PFE and Innovent Biologics announced a global strategic licensing and collaboration agreement covering the research and development of 12 early-stage oncology programs, including antibody-drug conjugates and multi-specific antibody therapies. The alliance combines PFE’s global development and commercialization infrastructure with Innovent’s oncology discovery and early clinical expertise. The portfolio includes eight Innovent-originated and four Pfizer-originated programs, with select assets to be jointly developed and funded. Under the structure, Innovent will advance programs through Phase 1 before PFE assumes leadership for later-stage global development. Financial terms include a $650 million upfront payment to Innovent and potential milestone payments of up to $9.85 billion, plus tiered royalties and shared commercialization rights in key regions.

Separately, on May 20, Pfizer Inc. (NYSE:PFE) reported Phase 2 clinical data for its investigational 25-valent pneumococcal conjugate vaccine PF-07872412, evaluating safety, tolerability, and immune response in infants versus PREVNAR 20. The regimen followed a four-dose schedule at 2, 4, 6, and 12–15 months of age. Results showed strong immunogenic responses across all 25 serotypes, with notably higher antibody titers for key strains such as serotype 3 compared with the comparator vaccine. Safety outcomes were consistent with established pneumococcal vaccines, with similar local injection-site reactions and no new safety concerns. Based on these findings, PFE initiated a pivotal Phase 3 pediatric program in May 2026 to further evaluate efficacy and immunogenicity across a larger population.

Pfizer Inc. (NYSE:PFE) is a global biopharmaceutical company that develops medicines and vaccines. It focuses on key areas including oncology, immunology, internal medicine, and infectious diseases.

10. Sanofi (NASDAQ:SNY)

PE Ratio: 19.26

Sanofi (NASDAQ:SNY) is among the most undervalued stocks to invest in.

TheFly reported on May 27 that the US Food and Drug Administration (FDA) has granted priority review to SNY’s New Drug Application for venglustat, an investigational oral glucosylceramide synthase inhibitor intended for type 3 Gaucher disease, a rare lysosomal storage disorder with neurological involvement. If approved, the therapy would represent the first U.S. treatment targeting the progressive central nervous system manifestations of GD3.

The submission is supported by Phase 3 LEAP2MONO trial data in patients with stabilized systemic disease, where venglustat met its primary endpoints and most secondary endpoints. The treatment was generally well tolerated with no new safety concerns reported. The FDA has set a target action date of November 25, 2026, under its priority review designation for therapies addressing serious unmet medical needs.

Separately, on May 18, Sanofi (NASDAQ:SNY) reported positive results from its global Phase 2 ElevAATe study of efdoralprin alfa in adults with alpha-1 antitrypsin deficiency–related emphysema. The investigational therapy demonstrated superior performance versus standard augmentation treatment in restoring and maintaining normal functional alpha-1 antitrypsin levels, meeting the primary endpoint. Dosing every three weeks produced more than threefold higher mean trough increases compared with weekly plasma-derived therapy.

All key secondary endpoints were achieved, including sustained normalization of protein levels over the study period, with continuous coverage in the treatment arm versus substantially lower coverage under standard care. The safety profile was consistent with existing therapies, with no discontinuations due to.

Sanofi (NASDAQ:SNY) is a global biopharmaceutical company headquartered in Paris, France. It develops medicines and vaccines, with a strong focus on immunology, oncology, neurology, and rare diseases.