TM editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

Written by SmallCapPower.com

Investing in pharmaceutical companies can be risky when they are seeking FDA approval, so why not invest in the companies that have proven to be profitable? Today we have identified the four most profitable Canadian small cap pharma stocks with the best Return on Equity. 

1. Medicure Inc. (TSXV: MPH) (MCUJF)
Pharmaceuticals

Medicure Inc. is a pharmaceutical company engaged in the research, clinical development and commercialization of human therapeutics...[with a] focus on the sale and marketing of its acute care cardiovascular drug, AGGRASTAT (tirofiban hydrochloride)...in the United States and its territories...

• Market Cap: $102,091,463
• Total Revenue (LTM): $37,778,470
• Debt to Equity: 212.3%
• 5 Year Average ROE: 199%

2. Biosyent Inc. (TSXV: RX) (BIOYF)
Pharmaceuticals

BioSyent Inc. is a specialty pharmaceutical company which, through its subsidiary, BioSyent Pharma Inc., acquires or in-licenses and develops pharmaceutical products for sale in Canada and certain international markets [through its]...Community and Women’s Health Unit;...the Hospital Business Unit...the International Pharmaceutical Unit, and the Legacy Business.

• Market Cap: $114,450,954
• Total Revenue (LTM): $17,922,270
• Debt to Equity: 0.0%
• 5 Year Average ROE: 50%

3. Cipher Pharmaceuticals Inc. (TSX: CPH) (CPHRF)
Pharmaceuticals

Cipher Pharmaceuticals Inc. is a specialty pharmaceutical dermatology company with a portfolio of commercial and late-stage products...Its products treat indications, such as severe nodular acne, recurrent herpes labialis, nail dystrophy, dermal ulcers, mild/moderate onychomycosis, acne, dry skin, keratosis, hyperpigmentation, hyperkeratotic actinic keratosis and high cholesterol.

• Market Cap: $148,973,054
• Total Revenue (LTM): $54,713,820
• Debt to Equity: 201.9%
• 5 Year Average ROE: 25%

4. Knight Therapeutics Inc. (TSX: GUD) (KHTRF)
Pharmaceuticals

Knight Therapeutics Inc. is a Canada-based pharmaceutical company engaged in developing, acquiring, in-licensing, out-licensing, marketing and distributing pharmaceutical products, consumer health products and medical devices in Canada and select international markets...[and has] prescription pharmaceuticals and medical devices in various stages of development...

• Market Cap: $1,416,172,513
• Total Revenue (LTM): $5,940,000
• Debt to Equity: 0.0%
• 5 Year Average ROE: 17%