Opening a Roth IRA account was one of your best moves in preparing for retirement. I'm assuming this applies to you. If you don't have a Roth IRA, get one. This article will wait on you until you've got one set up. 

Seriously, Roth IRAs are great retirement tools that many Americans should consider. But how should you invest your Roth IRA money? One great choice is to invest in stocks with really strong growth prospects. These kinds of stocks are ideal for Roth IRAs, because you won't have to pay taxes on the big gains.

While some might gravitate to tech stocks to find growth, I suggest also looking at biotech stocks. One such stock that you've probably been overlooking for your Roth IRA is Vertex Pharmaceuticals (NASDAQ:VRTX)

Three scientists looking at image of DNA

Image source: Getty Images.

Transforming the landscape in cystic fibrosis

Cystic fibrosis (CF) is a rare disease that progressively limits the ability to breathe. Until 1989, there was more not known about the cause of CF than was known. In that year, though, the CF transmembrane conductance regulator (CFTR) gene was discovered. Scientists eventually identified around 2,000 mutations of this gene, with 127 of them linked to CF.

While treatments existed to address the effects of CF, no drug had been approved to target the underlying cause of the disease until Vertex won FDA approval in 2012 for Kalydeco. That first approval was for treating CF patients with a specific mutation of the CFTR gene known as G551D. 

Vertex followed up with a second approval in late 2014 for Kalydeco in treating patients ages 6 and older with the R117H mutation of the CFTR gene. The company received the green light from the FDA several months later for the drug to treat children ages 2 to 5 with any of 10 specific CFTR mutations. Earlier this year, the FDA expanded the number of CFTR mutations approved for Kalydeco from 10 to 33.

A second drug, Orkambi -- a combination of lumacaftor and Kalydeco -- won FDA approval in 2015 for treating CF patients ages 12 and older with two copies of the F508del mutation. This was huge, because having two copies of this specific CFTR gene mutation is the leading cause of CF. A little over a year later, Vertex gained approval for Orkambi in treating CF patients ages 6 through 11. 

It's no exaggeration to state that Vertex has transformed the landscape in the treatment of CF. As a result of its virtual monopoly in the indication, Vertex stock has more than doubled so far this year.

Enormous growth potential

The good news for CF patients and investors is that Vertex has much more to come. Vertex hopes to receive FDA approval for its third CF drug by Feb. 28. Phase 2 results from a clinical study of this two-drug combination of tezecaftor and Kalydeco showed fantastic efficacy. Those results also bode well for Vertex's three-drug combos, two of which are expected to be the subjects of late-stage studies beginning in the first half of 2018.

The company's growth potential for the near future depends on treating more CF patients. There are roughly 29,000 CF patients eligible for treatment with Kalydeco and Orkambi. The tezecaftor-Kalydeco combo, along with label extensions for Orkambi, could expand this target population to 44,000.

But the big boost could come from Vertex's triple-drug combos. The company thinks its target CF population would increase to 68,000 if its wins approval for these therapies. That would leave only 7,000 or so CF patients in North America, Europe, and Australia without an approved treatment. Vertex is working with gene-editing pioneer CRISPR Therapeutics (NASDAQ:CRSP) on developing drugs for these remaining patients. The two companies are targeting potential treatment of sickle-cell disease using gene editing as well. 

Also, while Orkambi gained regulatory approval in Europe, the company must negotiate reimbursement deals country by country. Vertex has made some progress on this front, but still has work to do. This presents near-term growth opportunities for the company.

Wall Street analysts project that Vertex will grow earnings by 68% annually over the next five years. With the company's promising pipeline, that growth seems attainable. 

Risks

Any stock you buy for your Roth IRA will carry some risks. Vertex is no exception.

There's always a chance that the company's pipeline candidates won't be successful. Vertex could also encounter challenges in negotiating prices for its drugs in the U.S. and in Europe. And Vertex won't enjoy its monopoly in CF forever. Galapagos (NASDAQ:GLPG) and Novartis (NYSE:NVS) have experimental CF drugs in development. The bigger threat is probably from Galapagos, which plans to soon begin clinical studies for its three-drug combo.

Still, Vertex's "building block" strategy of starting with individual drugs and then moving to two-drug combos, and then to three-drug combos, is a lower-risk approach than many biotechs take. And although rivals could be on the market in the future, Vertex enjoys a solid head start. Overall, I think Vertex Pharmaceuticals' growth potential makes it a great stock to include in your Roth IRA portfolio.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.