Since 1983, the U.S. Food and Drug Administration has granted orphan-drug designation to over 3,500 drugs. This designation provides incentives to companies developing drugs and biologics for rare diseases and conditions, with "rare" generally meaning a disease affecting fewer than 200,000 patients in the United States. Of the drugs receiving the orphan-drug designation, more than 500 have gone on to win approval. 

Biopharmaceutical companies are attracted to the orphan-drug market, because it can be very lucrative. Around 30 million Americans suffer from 7,000 or so rare diseases. Market research firm EvaluatePharma projects that worldwide orphan-drug sales will top $200 billion by 2022. 

But what are the top orphan-drug stocks to buy right now? Here's why I'd put AbbVie (NYSE:ABBV), Celgene (NASDAQ:CELG), and Vertex Pharmaceuticals (NASDAQ:VRTX) at the top of the list.

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AbbVie

AbbVie claims one of the current top-selling orphan drugs -- Imbruvica. The drug won orphan drug designation for several indications, including chronic lymphocytic leukemia (CLL), mantle cell lymphoma, chronic graft-versus-host disease, and Waldenstrom's macroglobulinemia. In 2017, Imbruvica generated sales for AbbVie of nearly $2.6 billion. AbbVie's partner on Imbruvica, Johnson & Johnson, made an additional $1.9 billion from the drug.

Another orphan drug in AbbVie's lineup is Venclexta. Like Imbruvica, Venclexta received orphan drug designations for CLL and mantle cell lymphoma plus another for multiple myeloma. At this point, Venclexta is only approved for treating CLL. It's not a big moneymaker for AbbVie yet, but EvaluatePharma projects the drug could generate over $1.8 billion in sales by 2022.

Empliciti also won orphan-drug designation from the FDA in 2011 for multiple myeloma. The drug gained approval in 2015 for the indication. AbbVie's partner, Bristol-Myers Squibb, made over $200 million from Empliciti in 2017. However, AbbVie didn't make enough revenue to provide details for the drug in its full-year 2017 results.

The company does have another promising orphan drug in its pipeline, though. Veliparib is currently being evaluated in late-stage studies for treatment of breast cancer and ovarian cancer. The experimental drug has received orphan-drug designation for five indications.

Although orphan drugs don't account for all of AbbVie's growth potential, they certainly are important for the company's future. And that future is bright indeed. AbbVie's top-selling drug, Humira, continues to enjoy momentum. The company recently reported its fourth-quarter and full-year 2017 results, wowing investors with its projected 2018 adjusted earnings-per-share growth of 32%.

Celgene

Celgene's Revlimid is currently the No. 1 best-selling orphan drug in the world. The FDA has granted orphan-drug designation to Revlimid for eight different rare diseases, three of which the drug has already also won approval for -- multiple myeloma, myelodysplastic syndromes (MDS), and mantle cell lymphoma. 

The biotech's other blood cancer blockbuster, Pomalyst, also obtained orphan-drug designation for multiple myeloma and won approval for the indication. Idhifa and Istodax are two other orphan drugs in Celgene's blood cancer franchise, gaining orphan-drug designation and regulatory approval for acute myelogenous leukemia and non-Hodgkin lymphoma, respectively. 

Abraxane received a couple of orphan drug designations, one for pancreatic cancer and another for melanoma. However, the melanoma designation was later withdrawn. Abraxane is currently approved for treating three indications -- pancreatic cancer, breast cancer, and non-small-cell lung cancer. 

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Celgene also has another orphan drug outside the hematology and oncology areas with Otezla. Just a couple of weeks ago, the FDA granted orphan-drug designation to Otezla for treatment of pediatric patients with ulcerative colitis. The drug hasn't won approval for that indication yet, though. 

EvaluatePharma projects that Celgene will be the top company in the world in total orphan-drug sales by 2022. Two of its orphan drugs, Revlimid and Pomalyst, are expected to rank in the top 20 for orphan-drug sales. 

While Celgene's pipeline includes several promising candidates that could obtain orphan-drug designation, one likely winner already classified as an orphan drug is ozanimod. EvaluatePharma thinks ozanimod could be one of the five biggest new launches of 2018. However, that potential launch would be in treating relapsing multiple sclerosis, while ozanimod's orphan-drug designations were for pediatric ulcerative colitis and pediatric Crohn's disease.

Celgene stock is a bargain hunter's dream right now, with shares trading at less than 10 times expected earnings. The biotech also expects to grow adjusted earnings per share by 19.5% annually over the next several years.

Vertex Pharmaceuticals

Vertex dominates the cystic fibrosis (CF) market with two approved drugs, Kalydeco and Orkambi. Both drugs have also received orphan-drug designation for CF. 

Another one of Vertex's drugs that isn't yet on the market also gained orphan drug designation for CF -- a combination of tezecaftor and ivacaftor (Kalydeco). An FDA approval decision for the combo is expected by Feb. 28, 2018.

The next big step for Vertex is advancing two triple-drug combos into late-stage testing. These late-stage studies should begin in the first half of this year. Assuming all goes well, the drugs should enable Vertex to treat close to 90% of all CF patients.

Vertex also hopes to expand beyond CF. The company's pipeline includes candidates targeting treatment of several genetic diseases such as adrenoleukodystrophy, alpha-1 antitrypsin deficiency, and polycystic kidney disease. 

EvaluatePharma projects that Vertex will be No. 12 overall in orphan drug sales by 2022. The biotech should rank fourth, however, excluding orphan drug sales targeting various types of cancer. Orkambi is projected to become the seventh-highest-selling orphan drug within the next five years. 

Vertex stock looks expensive, at least on the surface. Shares trade at 55 times expected earnings. However, the biotech could grow earnings by nearly 70% annually over the next five years. Assuming Vertex can achieve this level of growth, the stock's valuation is attractive right now.

Best pick

If you're looking for tremendous growth, Vertex is the best pick of these orphan-drug stocks. On the other hand, if you're more of a value investor, Celgene appears to be the best choice. But I think the best alternative overall is AbbVie.

AbbVie is a bargain, with shares trading at 13 times expected earnings. It also has solid growth prospects, with Wall Street projected annual earnings growth of 17%. Unlike Celgene and Vertex, though, AbbVie is also a great choice for income-seeking investors. The company's dividend currently yields 2.45% -- and AbbVie has a fantastic track record of dividend increases. In my view, AbbVie checks off all the boxes better than any other orphan-drug stock on the market.

Keith Speights owns shares of AbbVie and Celgene. The Motley Fool owns shares of and recommends Celgene and Johnson & Johnson. The Motley Fool recommends Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.