Two pharmaceuticals tiddlers that could beat the best stocks

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There are few things growth investors likes more than checking the news and seeing one of their shares climbing.

FDA approval

That's what awaited Beximco Pharmaceuticals(LSE: BXP) shareholders this morning, with their shares up 20% in early trading to 55p. But that's only part of the growth story -- Beximco shares are up 175% over the past 12 months, and have risen nearly fivefold in the past five years.

So what's behind it -- some revolutionary new discoveries? Actually, no, the Bangladesh-based company does something simpler but profitable -- it manufactures generic pharmaceuticals products, which sell in great quantity and at much lower prices than their branded counterparts, and are a boon to much of the developing world.

It's what happens to a lot of pioneering products invented by the likes of GlaxoSmithKline and AstraZeneca when their patents expire, which is something both giants have been suffering from in recent years, and the drugs end up being made by companies like Beximco and sold cheaply.

Today's big share price gain is a result of the company receiving a second product approval from America's FDA, this time for Sotalol Hydrochloride, a generic version of the cardiovascular drug Betapace -- and cardiovascular medicine is big business in overfed Western countries. The product should launch in early 2017.

There are no forecasts for Beximco, but even after today's rise they're still only on a trailing P/E of 11 based on December 2015 figures. And with a maiden dividend last year yielding 3.9%, we could be looking at one of tomorrow's cash cows.

A growth star

Back in 2011, speciality drugs and pharmaceutical services firm Clinigen(LSE: CLIN) was top of the Sunday Times Fast Track 100 list, which ranks the country's fastest growing privately held companies. Clinigen went on to float on the London Stock Exchange in 2012 and since then its track record has been stellar, with a quadrupling of the share price to 742p.

Today the company announced an extension of its partnership with healthcare company BTG, with a new agreement "to manage BTG's critical care portfolio across the whole of Europe and now into new territories in Asia."

Chief commercial officer Steve Glass enthused that the deal "demonstrates the value of our unique, synergistic businesses, which enables us to provide safe and ethical access to a medicine throughout its lifecycle - from development to approval, to launch and beyond."

But after their meteoric rise, are Clinigen shares still worth buying? Since that maiden set of results in 2012, we've seen earnings per share soar by 160%, and there's a further 18% currently being forecast for the year to June 2017. If anything, that seems conservative to me, especially in the light of 2016 results released last month.

Revenue for the year rose by 84%, with adjusted EBITDA up 73%. There was plenty of cash coming in too, with cash flow up 213%, and that fed through to a dividend rise of 18%. Dividend yields are still modest at under 1%, but a progressive policy is lifting them well ahead of inflation every year. There's a further 19% hike on the cards for the current year, and I see terrific potential for long-term dividend growth here.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK has recommended AstraZeneca, BTG, and Clinigen. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.