A last-minute three-pointer at the buzzer that you have no doubt will go in the basket. A job interview where you were at the top of your game. A stock with tremendous growth prospects. Some things you just know will be successful.
With this in mind, we asked three Motley Fool contributors to identify surefire growth stocks you can buy right now. Here's why they chose Axsome Therapeutics (AXSM -2.61%), Eli Lilly (LLY -1.81%), and Vertex Pharmaceuticals (VRTX -1.02%).
Multiple shots on goal
Keith Speights (Axsome Therapeutics): It usually takes only one big product to be a game changer for a small biotech stock. Axsome could have five.
The company already has two products on the market. Auvelity has blockbuster potential as a treatment for major depressive disorder. Axsome launched the drug only a few months ago. It also picked up rights to sleep-disorder drug Sunosi from Jazz Pharmaceuticals.
Auvelity could have additional indications on the way. The drug (also known as AXS-05) achieved the primary endpoint in a late-stage clinical study targeting Alzheimer's disease agitation. Axsome also plans to advance the therapy into a late-stage study for smoking cessation.
Meanwhile, Axsome expects to resubmit for U.S. approval of experimental migraine drug AXS-07 later this year. The company plans to file for approval of AXS-14 in treating fibromyalgia as well. Last, but not least, Axsome is conducting a phase 3 study of AXS-12 in treating narcolepsy. Results from this study are anticipated in the first half of 2023.
Despite all of this potential, Axsome's market capitalization currently stands below $2.8 billion. With multiple shots on goal, I'm confident that the company will score several times over. Look for Axsome to grow much larger within the next few years.
A beast that's only going to get bigger
David Jagielski (Eli Lilly): One growth stock I'm incredibly bullish on is Eli Lilly. The company already has some phenomenal products in its portfolio, including top-selling diabetes medicine Trulicity, which generated $7.4 billion in sales last year and grew 15% year over year.
But what's on the horizon for the company makes the stock look like a deal, even though it's trading at 50 times earnings. That's because diabetes medication tirzepatide has the potential to be the biggest drug ever. Some analysts believe the drug may hit $100 billion in annual revenue at its peak.
It has already been approved to treat diabetes and is sold under the brand name Mounjaro. But it may also be the next big weight-loss drug, demonstrating that it can help people shave off up to 22.5% of their body weight in clinical trials.
Eli Lilly also has a promising Alzheimer's treatment, donanemab, which failed to obtain accelerated approval last month. However, the rejection was actually good news because the problem was the treatment was too effective and not enough patients ended up using it for long enough. They were able to stop dosing early due to the treatment's effectiveness.
The data was insufficient for the U.S. Food and Drug Administration to make a decision on it. That's a great reason for rejection as it's the traditional approval that matters most for the company. The promising trial results don't hurt those odds.
Eli Lilly is a hugely profitable company that netted a profit of $6.2 billion last year (nearly 22% of its top line), and the bottom line is likely to keep on growing. The company has some exciting growth opportunities in tirzepatide and donanemab, plus even more trials ongoing in its pipeline.
Despite its already massive $320 billion market cap, this is a business that can get even bigger in the future. For long-term investors, Eli Lilly is as close to a no-brainer buy as you'll find in healthcare.
This biotech is still just getting started
Prosper Junior Bakiny (Vertex Pharmaceuticals): While many growth stocks have taken it on the chin in the past year, that hasn't been the case for Vertex Pharmaceuticals. The biotech has crushed the market over the trailing-12-month period, boosted by solid revenue, earnings growth, and excellent long-term prospects. What's more, the drugmaker continues to impress with its financial results.
In 2022, Vertex's revenue increased by 18% year over year to $8.9 billion, while its net income soared to $3.3 billion, up 42% compared to the previous fiscal year. Vertex's lineup of medicines that treat the underlying causes of cystic fibrosis (CF) continues to generate a small fortune for the biotech. But the drugmaker is inching closer to new approvals.
The company recently reported sending applications for regulatory approvals for exa-cel in the U.K. and Europe, while a rolling submission is underway in the U.S. Exa-cel treats beta-thalassemia and sickle cell disease, two blood-related diseases. With few therapy options for either illness, exa-cel could address a severe unmet need while achieving impressive levels of commercial success in the process.
Vertex also has other exciting programs in its pipeline. These include therapies that target type 1 diabetes and acute and neuropathic pain, along with others.
I think that Vertex will earn major regulatory approvals and expand its lineup of medicines over the next several years. Revenue and earnings will continue growing at a good clip as will the company's stock price. That's an excellent recipe for growth-oriented investors.
