Moderna (MRNA -4.18%) has seen its stock price soar nearly 800% over the past two years. That's after the biotech company brought its coronavirus vaccine to market and generated billions of dollars in revenue and profit. Those of you who bought the shares back in 2019 are probably cheering right now. But if you missed out on Moderna, you may be feeling a little glum. No need to.
There always are promising investment opportunities around. And right now, I'm excited about a biotech company that, like Moderna, generates billions of dollars in revenue and profit. It's actually been doing so for a while. And this company just so happens to be working on a program with... none other than Moderna. Let's take a close look at my best biotech stock to buy and hold.
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A growing, billion-dollar product
Vertex Pharmaceuticals (VRTX -1.68%) is the worldwide leader in cystic fibrosis (CF) treatments. The company has four commercialized products. And of these, the star is its most recent: Trikafta. This treatment can be used in about 90% of the CF patient population. Last year, Trikafta generated more than $5.6 billion in revenue. But growth isn't over for Trikafta. Vertex said in its most recent earnings call that more than 25,000 patients remain to be treated by its CF drugs. And they can be reached as Vertex wins approvals in more age groups and reimbursements by healthcare systems in additional countries.
At the same time, Vertex is advancing a candidate that may eventually steal the spotlight from Trikafta. So, Vertex's biggest competitor is... Vertex. And that's great news. This candidate is now involved in two phase 3 trials that will compare it with Trikafta. The company expects to complete trial enrollment by the end of this year or in early 2023.
Now, you might be wondering: What about the 10% of CF patients that can't be treated with Vertex's current drugs? And this is where Moderna comes in. Vertex and Moderna are working on mRNA candidates to target the underlying cause of the disease. The idea is the candidate would instruct cells in the lungs to produce a key protein. Right now, these patients' cells can't produce this particular protein.
A major breakthrough
The companies actually made a major breakthrough recently. They showed they can deliver the necessary full-length mRNA for the production of this protein to human bronchial epithelial cells in vitro -- and to bronchial epithelial cells in nonhuman primates. Delivery in the past had been a challenge. So, this is major progress. The next step will be clinical trials.
All of this means Vertex is likely to remain a leader in CF for quite some time. And that means the blockbuster levels of revenue should continue. But Vertex also is expanding into other therapeutic areas. And the next one could represent yet another blockbuster.
Vertex and partner CRISPR Therapeutics are working on CTX001, a gene-editing candidate for blood disorders. This would be a one-time curative treatment. And right now these disorders -- sickle cell disease and beta thalassemia -- have limited treatment options. So, success here could be big. Clinical trial data so far have been positive. The companies aim to file for regulatory approval by the end of this year.
This means Vertex may be able to branch out into an area beyond CF very soon. This is critical for Vertex. Here's why. The stock actually performed poorly over the past year or so because investors worried about Vertex's non-CF potential. The company had announced the failure of two genetic disease candidates and that weighed on sentiment.
Investors are optimistic
In recent times, though, investors seem to be more optimistic. The stock has climbed about 13% since the start of the year. More positive news on CTX001 clearly could drive the shares significantly higher.
Of course, risk still exists. The failure of a candidate can happen at any point. Even in late-stage trials. And any bad news about CTX001 could hurt Vertex shares. But this is a risk that goes along with investing in biotech companies.
For investors willing to accept this risk, though, the overall picture for Vertex looks bright. The company already is generating billions of dollars from its CF treatments. It's likely to remain the leader in CF for the foreseeable future. And it's moving closer to bringing a non-CF candidate to market. So, if you missed out on the explosive Moderna story don't worry. Vertex may be the next great stock to buy and hold for the long term.
