Big Pharma, Big Returns?

The UK's biggest pharmaceutical companies are leading the fight against Covid-19, but underwhelming share price performance means investors need to look elsewhere

James Gard 15 March, 2021 | 11:13AM
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UK pharma company AstraZeneca (AZN) was the first company to make a significant breakthrough in the fight against coronavirus and is now the second largest company in the FTSE 100 with a market cap just under £90 billion. Rival GlaxoSmithKline (GSK), which is also producing a Covid-19 vaccine, is in the eighth largest company in the index. Income investors are likely to have an even higher exposure to these dividend-paying companies. But given that this is Big Pharma’s moment to shine, why have are share prices in the doldrums, and are there any alternatives in the space?

“For any retail investor, [if] you do have healthcare exposure, it’s probably biased towards those large-cap pharmaceutical stocks,” says BB Healthcare (BBH) trust manager Paul Major. These types of companies “don’t really generate any shareholder value”, he says. “There may be a nice dividend but the share price doesn’t do very much.”

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James Gard  is content editor for