How do I value Pharmaceutical stocks in the US— what are key things I have to look out for?

Have you considered drug distributors as an alternative? Eg WBA.

For reading material, look into the articles written by folks who publish at seeking alpha. Their articles can be really in depth. Comments are the gold section.

Pharmaceutical companies are tricky. Because the drug needs to be approved by the FDA first and regulated. There are a lot of R&D expenses required, and it takes a few years for a particular drug to be approved (and many stages too). And it's a make or break thing - the moment something goes wrong that thwarts/delay the approval, that's where it'll be super troublesome, and it's something you are unable to predict/forecast as a retail investor.

Personally, I find the Pharma sector extremely difficult to analyze. A company can have a potential breakthrough drug that causes the stock to skyrocket, followed by a failure of the clinical testing that causes the stock to plunge.

As a sector, bio tech/pharma will likely be a growing sector in years to come as the world grapples with an aging population. So I'd mitigate the risk by buying a Pharma ETF or UT, in order not to take on too much risk. This allows me to diversify across several reasonable decent pharma companies. As a sector, it is a tactical allocation to me and will not be something that I will put too much of my portfolio in.

Very hard to value. It depends on the popularity of their medicine as well as if it receives authority's approval to be used in medicine