July is the season of barbecues, fireworks, and holidays. Many people don’t want to think too deeply about anything. A contributor at Three Fool.com thinks he has a solution for investors who don’t want to think too deeply.
The reason they chose Eli Lilly (NYSE: LLY), Regeneron Pharmaceuticals (Nasdaq: REGN)and Vertex Pharmaceuticals (Nasdaq: VRTX) Naturally Biotech Stocks I will purchase in July.
Eli Lilly expected to be worth more than $1 trillion
David Jagielski (Eli Lilly): One of the best growth stocks you can buy right now is Eli Lilly and Co. This healthcare company has a lot of growth catalysts in its portfolio, and it’s entirely possible that its valuation could exceed $1 trillion.
The company currently owns diabetes drug Maunjaro and the recently approved weight loss drug Zepbound, which together generated $2.3 billion in revenue in the first three months of this year. Maunjaro is now the company’s best-selling drug, overtaking Trulicity, and there’s plenty of room for growth.
Eli Lilly may be adding some more promising weight-loss products to its growing portfolio. Retatortide is in Phase 3 trials and has shown impressive results, helping patients lose 24% of their body weight, making it the company’s best-selling weight-loss drug to date. Oral medication Orforglipron is also in late-stage trials and could be another catalyst.
Aside from weight loss, another promising product that could become a blockbuster is the Alzheimer’s drug donanemab, which the U.S. Food and Drug Administration recently approved and which Lilly will market under the brand name Xanthra.
Eli Lilly’s share price has nearly doubled over the past 12 months, and the business still has great growth prospects, so it’s hard not to like the stock for the long term. What better time to buy the stock than in July, just before earnings are released in August and investors get insight into how much revenue Zepbound and Maunjaro are generating, and whether those forecasts are likely to be revised upwards?
Not only is this healthcare stock the most likely to be the first to reach a $1 trillion market cap, but it could also significantly surpass that valuation in the long term.
Regeneron shows no signs of slowing down
Prosper Jr. Bakiny (Regeneron Pharmaceuticals): It hasn’t always been clean, easy or simple, but Regeneron Pharmaceuticals has generated significantly above-average profits over the past five years. To explain that performance, one can point to the drug company’s ability to innovate. Early in the pandemic, Regeneron developed and marketed a COVID-19 antibody, which contributed significantly to its bottom line. Sales of that product plummeted last year.
But Regeneron can still count on two of its big hits: Dupixent for eczema and Eylea for wet age-related macular degeneration. Dupixent is especially promising; it’s been Regeneron’s biggest growth driver for some time, and there’s plenty more to come. The company is also exploring a label expansion for its COPD treatment that was just approved in the European Union; the U.S. Food and Drug Administration could approve a similar label expansion by late September.
How will it work? Estimates vary, but some analysts expect the COPD indication to boost Dupixent sales by $3.5 billion. Regeneron’s partners in the program recorded revenue from the drug last year of $1.5 billion. Sanofi It was about $11.6 billion.
Regeneron has growth drivers beyond Dupixent and Eylea and, importantly, an attractive pipeline of candidates. Particularly exciting early-stage programsThe treatment, a gene therapy for inherited hearing loss, has restored hearing in one patient and significantly improved hearing in another in an ongoing Phase 1/2 trial.
This drug candidate has a long road ahead of it, but whether it succeeds or not, Regeneron has over 40 candidates in its pipeline. The company’s history of innovation speaks for itself. As in the past, Regeneron should be able to deliver significant breakthroughs over the long term and generate strong financial results, which should be followed by strong stock market performance.
Watch Vertex grow
Keith Speights (Vertex Pharmaceuticals): Vertex Pharmaceuticals is a stock you can buy and sit back and watch grow because this large biotechnology company has several growth drivers working in its favor.
One obvious example is Vertex’s cystic fibrosis (CF) franchise. The company’s blockbuster drug Trikafta/Kaftrio dominates the CF market: no other company has an approved therapy that treats the underlying cause of CF.
But Vertex may soon have another big win in the CF indication: The FDA is expected to decide on approval of the company’s triple combination drug, Banzacaftor, by January 2, 2025.
Vertex’s newest approved product, Casgevy, should also soon begin generating significant revenue. It is the first CRISPR gene-editing therapy to receive regulatory approval. Casgevy is a one-time treatment for sickle cell disease and transfusion-dependent beta-thalassemia.
Also keep an eye on suzetrigine (VX-548). Vertex may gain U.S. approval for this non-opioid drug to treat acute pain early next year. The company is also advancing the drug into a Phase 2 study for peripheral neuropathic pain. Suzetrigine should have a strong commercial opportunity.
Vertex’s pipeline includes inaxaprine, another promising late-stage program targeting APOL1-mediated kidney disease (AMKD), and the company believes it has a path to applying for accelerated approval of the agent if results from a planned interim analysis after 48 weeks of treatment are favorable.
Pending Acquisitions Alpine Immune Science The deal potentially gives Vertex another late-stage candidate, which it considers Alpine’s promising kidney disease drug pobetaccept a “pipeline product” that could lead to other therapies in the future.
Biotech stocks always carry some risk, but I think Vertex has a very good chance of success.
Should you invest $1,000 in Vertex Pharmaceuticals right now?
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of Motley Fool Stock Advisor The analyst team Top 10 Stocks Here are the stocks investors should buy right now…Vertex Pharmaceuticals was not among them. The 10 selected stocks have the potential to generate big gains over the next few years.
Things to consider NVIDIA This list was created on April 15, 2005…If you invested $1,000 at the time of recommendation, That comes to $771,034.!*
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David Jagielski We do not hold any positions in any of the stocks mentioned. Keith Speights He holds positions at Vertex Pharmaceuticals. Prosper Junior Bakiny The Motley Fool has invested in and recommends Vertex Pharmaceuticals. The Motley Fool has invested in and recommends Vertex Pharmaceuticals. Disclosure Policy.
3 easy stocks to buy in July Originally published on The Motley Fool
