Last year's market wasn't gloomy for every company. Investors bought certain stocks hand over fist. In most cases, these particular companies offered investors a solid reason to be optimistic about their future. And that's why they were able to defy the bear market.
I can easily think of three examples in the healthcare industry. Up-and-coming biotech Axsome Therapeutics (AXSM 0.17%) commercialized its first two products. Vertex Pharmaceuticals (VRTX -0.46%) proved to investors that it could expand beyond its core business. And AbbVie (ABBV -0.06%) -- facing declines in its biggest drug -- offered hope newer products would generate even more growth over time. Let's take a closer look at these three unstoppable stocks to keep on buying.
1. Axsome Therapeutics
Axsome soared more than 100% last year. But the average Wall Street estimate calls for more than a 60% gain in the coming 12 months from today's level.
Why should gains continue? Investors applauded Axsome's move from clinical-stage company to commercial-stage company. But the gains don't price in revenue growth from those products and potentially others to come this decade. Axsome is at the very beginning of its growth story.
The company launched Sunosi, a sleep disorders drug it acquired from Jazz Pharmaceuticals, in spring of last year. Then it gained approval of its own antidepressant, Auvelity, and launched it later in the year. The drug is fast-acting, so it could stand out from rivals. In fact, Auvelity may reach revenue of $1.3 billion by 2029, according to GlobalData.
Axsome also recently reported positive phase 3 trial results from its candidate to treat Alzheimer's disease agitation. An eventual approval here could be big. That's because there currently aren't any approved treatments in this area. The company also plans to submit its candidate for migraine treatment to regulators in the third quarter.
So, there's a lot of news -- and potential earnings growth -- on the horizon for Axsome. And that could translate into more gains for the stock.
2. Vertex Pharmaceuticals
Vertex climbed after alleviating investors' biggest fear. The concern was that Vertex wouldn't be able to expand beyond its specialty of cystic fibrosis (CF) treatment. This came after the company reported two clinical trial failures in rare disease alpha-1 antitrypsin deficiency in recent years.
But last year, Vertex reported positive data from its trial of exa-cel, a one-time curative treatment candidate for two blood disorders. And the company launched regulatory submissions in the U.S., the U.K., and Europe later on in the year. The product could be big because today, treatment options for beta thalassemia and sickle cell disease are limited.
Vertex and partner Crispr Therapeutics are running an exa-cel phase 3 trial with pediatric patients right now -- success here could result in even more potential patients for the treatment.
It's important to remember that Vertex's position in CF represents growth too. The company is the market leader, and that's likely to continue. Vertex's top-selling Trikafta brought in more than $5.6 billion in sales in 2021. And the company is studying a new candidate in a phase 3 trial that might be even better than Trikafta.
Vertex today trades for less than 20 times forward earnings estimates. That looks like a steal considering its strong CF portfolio -- and the potential of exa-cel.
3. AbbVie
AbbVie is another stock that's worried investors. The company sells blockbuster immunology drug Humira. That drug generated a whopping $20 billion in revenue in 2021.
But here's the bad news: Humira's losing exclusivity as of now. That means revenue soon will be on the decline. This already has happened internationally.
But here's why investors felt optimistic about AbbVie last year -- and should feel that way today, too. The company's two newer immunology drugs -- Skyrizi and Rinvoq -- together are set to eventually beat Humira. The drugs are on their way to winning approval in all of Humira's approved indications. And Skyrizi and Rinvoq combined should generate more than $21 billion in revenue by 2027, the company predicts.
AbbVie's neuroscience and aesthetics portfolios also present big growth potential. For example, the company expects two of its migraine treatments to reach peak sales of more than $1 billion. And AbbVie forecasts global aesthetics sales of more than $9 billion in 2029.
Today, AbbVie shares trade for about 13 times forward earnings estimates. At this level, it's easy to see this stock attracting more and more investors -- and heading for more gains this year and over time.
