Someone asked me to take a look at a smallcap pharmaceutical company today called Opko (OPK). The company specializes in veterinary medicine, which is a hot area for growth and acquisitions, but this one wouldn't be my cup of tea. Year over year net income is all over the place, and there is ludicrous competition in pharmaceutical companies just as a general rule.
If I was going to be in one, I'd want it to have a stable source of income, some product that is very broadly used and is mentioned by name. Like Mylan (MYL) with Epipen for example, nobody ever calls it an "epinephrine autoinjector". Without a product like that, this industry is just too dynamic. Barriers to entry can be as small as being able to locate competent biologists and some basic lab equipment. Discoveries are coming out every day and your hot pipeline can be quickly replaced.
For pharma, I stick with "big pharma" for that reason. Becton-Dickinson (BDX) is a well respected company for diagnostic supplies, and then maybe Novo-Nordisk (NVO), their insulin injectors are well liked by patients. Naturally, the retail line that Johnson & Johnson (JNJ) makes gives them a lot of that stability I love. For a name that might not be on the front of your mind, General Electric (GE) manufactures many of the MRI machines out there. Until gene editing becomes more widely accepted as therapy, we're going to be dealing with diseases like diabetes, high blood pressure, cholesterol, and its associated complications, for a good time to come.