Anti-diabetes medications are on pace to evolve into a $57.6 billion annual marketplace by 2024, according to a recent report by EvaluatePharma. While this sub-niche of the pharmaceutical space has started to slow from a revenue growth standpoint due to generic competition, diabetes is still expected to be the second-largest drug market behind only oncology in the next decade. As such, companies that have a sizable footprint in diabetes devices, medications, or therapies remain a popular growth vehicle for many investors. 

Which diabetes stocks should investors have their eyes on right now? We asked three of our Motley Fool contributors this question to gain some insight. They suggested Eli Lilly (LLY -0.53%), Abbott Laboratories (ABT -1.23%), and Provention Bio (PRVB). Here's why. 

A doctor holding a small black chalkboard with the word "diabetes" written on it.

Image source: Getty Images.

An established leader in diabetes 

George Budwell (Eli Lilly): Despite falling sales for both Humalog and Humulin, Eli Lilly's diabetes franchise hasn't missed a beat in the past few years. The company's revenue from this market segment, in fact, has nearly doubled since 2013. How did Lilly manage this feat? 

Lilly has relied mostly on innovation to keep its diabetes franchise headed in the right direction during this turbulent period. Since 2014, the company has brought to market the oral type 2 diabetes medication known as Jardiance; the once-weekly injected type 2 diabetes therapy Trulicity; and Basaglar, an alternative to Sanofi's long-acting insulin Lantus.

Each of these products has developed into a major cash cow for Lilly. In the most recent quarter, Jardiance's sales came in at a healthy $204 million, Trulicity hauled in a whopping $880 million, and Basaglar raked in $251 million. Best of all, these three growth products all saw their sales jump by more than 30% in the first quarter of 2019 compared to the same period a year ago. That's stellar sales growth any way you slice it. 

Lilly, however, isn't resting on its laurels in the high-value diabetes market. The company has designs to expand Trulicity's label to include patients at increased risk of cardiovascular disease. The drug's late-stage cardiovascular outcome trial results weren't exactly great, but they could be enough to convince regulators to grant this key label expansion early next year. Additionally, Lilly has a promising cocktail drug called tirzepatide under development that could also turn out to be a blockbuster in the next decade.  

Bottom line: Lilly's top-drawer diabetes portfolio should continue to play an outsize role in the company's growth story, making it a key franchise to keep tabs on for shareholders and potential investors alike. 

A Freestyle sequel could boost this stock

Keith Speights (Abbott Laboratories): Abbott Laboratories isn't just a diabetes stock. The company is a healthcare giant with three business segments that develop and market a wide range of products, including adult nutrition, blood and plasma screening, chronic pain devices, heart pumps, point-of-care testing, and remote heart failure monitoring. 

But diabetes has been and will continue to be key to Abbott's success. The company launched its Freestyle Libre continuous glucose monitoring (CGM) system in late 2017. CEO Miles White noted in the company's first-quarter conference call that "in a relatively short amount of time, [Freestyle] Libre has achieved global leadership among CGM systems for both type 1 and type 2 users."

Demand for the CGM system has been so great that Abbott is boosting its manufacturing capacity. The company expects this additional capacity will come on line in the second half of 2019. 

The main reason why I think that Abbott Labs is still a diabetes stock to watch closely is that it hopes to soon have a new version of Freestyle Libre on the market in the U.S. The company filed for approval of this version with the U.S. Food and Drug Administration (FDA) as an integrated continuous glucose monitoring (iCGM) system that can connect to other devices like insulin pumps.

It's uncertain how quickly the FDA will make a decision on the new version of Freestyle Libre. But if Abbott gets a green light to launch its new CGM in the U.S., the stock could enjoy a nice boost.

This clinical-stage drug could disrupt type 1 diabetes treatment

Todd Campbell (Provention Bio): A clinical-stage drug being developed by Provention Bio may delay or prevent type 1 diabetes altogether, improving treatment, quality of life, and longevity for over 1 million Americans.

On June 9, Provention Bio unveiled impressive phase 2 clinical trial data at the annual American Diabetes Association (ADA) meeting. The data showed that a single 14-day dose of PRV-031 (teplizumab) could delay type 1 diabetes diagnosis in patients at risk of developing the disease by a median two years compared to a placebo.

The findings are remarkable.

Unable to produce their own insulin because of an immune response that destroys insulin-producing cells, type 1 patients endure a lifetime of multiple daily insulin injections or insulin pump therapy. By interrupting the immune system's response, teplizumab aims to slow the destruction of insulin-producing cells, delaying or perhaps preventing disease progression.

In the study, the median time to a type 1 diabetes diagnosis was two years in the placebo group and four years in the PRV-031 group. Seventy-two percent of patients receiving a placebo were diagnosed with type 1 diabetes during the trial, compared to only 43% of the teplizumab patients.

The news sent Provention Bio's shares skyrocketing, yet its market cap of about $515 million may still undersell the opportunity to disrupt a multibillion-dollar market. It's anyone's guess if larger future trials will confirm the midstage data, but the possibility makes this one stock every healthcare investor ought to be watching.