As one of the hottest and most-watched companies in the biopharmaceutical sector, Vertex Pharmaceuticals (VRTX -0.06%) has a unique mix of stability and growth potential that's attractive to a broad crowd of investors. Given its collection of medicines on the market and a highly promising pipeline that's packed with some very sophisticated candidates, buying its shares today could be a great decision in five years. 

But drug developers tend to be risky bets, even once they're established. So is Vertex a smart purchase this summer, or would it be better to invest in something else? 

Why Vertex Pharmaceuticals is worth investing in

In short, Vertex is exposed to an abundance of growth opportunities in the near term. 

Its base of revenue from its sales of its four marketed cystic fibrosis (CF) medicines is unlikely to erode anytime soon, as patients need to continuously take their treatments to keep their symptoms at bay. For the record, management expects CF sales alone to reach nearly $10 billion this year, and its continual efforts to develop new therapies for the disease will almost certainly enable it to retain its long-standing vice grip on the CF market. In the long term, it might even develop therapies that could potentially cure some people with the condition, which would be a crowning achievement and a medical breakthrough, to say the least.

Regarding the nearer future, management thinks that the company might commercialize as many as five new medicines between now and the middle of 2028. In particular, its exa-cel gene therapy program for transfusion-dependent beta thalassemia (TDT) and sickle cell disease (SCD) could chalk up two regulatory approvals before the middle of 2024. Exa-cel is being developed in conjunction with CRISPR Therapeutics, and a successful pair of launches will likely set the two businesses up for further fruitful collaborations. It's also working on developing another combination therapy for CF. And by early 2024, it plans to share late-stage clinical trial data for its non-opioid pain medicine candidate.

So between its probable growth and a secure market share in CF, this company's shares are very likely to keep rising over time. Most pharma businesses lack this combination of safety and growth, which makes Vertex all the more appealing.

Understand the risks with Vertex

As great as Vertex looks as an investment, there are a few factors that investors need to appreciate before taking the plunge, starting with its valuation. 

Its price-to-earnings (P/E) multiple is 27, which is nearly the same as the pharma industry's average P/E. Typically, a company with multiple upcoming catalysts and a secure base of revenue would have a significantly higher valuation than the average. The fact that this stock's valuation hasn't budged much indicates that the market might not believe that faster-paced growth is on the way.

In fact, Wall Street analysts currently estimate that Vertex will only bring in around $10.5 billion in 2024, while also experiencing a slight drop in its earnings per share (EPS). For reference, in 2022 its top line was $8.9 billion. So if the analysts are correct, the additional revenue and earnings from the upcoming drug launches will take a while to drive faster growth, which is a reasonable conclusion. 

In other words, if you buy this stock right now, don't get your hopes up too much about it outperforming the market immediately. This year so far, its shares are neck-and-neck with the market. Getting news of exa-cel's approval for the two indications it's seeking will likely deliver a small bump to its shares, but it isn't a sure thing. 

But should you buy it? If you're looking for a relatively safe growth stock with a ton of upside over the rest of the decade and beyond, yes. This company doesn't have any long-term debt, and its main market is practically untouchable by the competition. And when considering its chances to break into lucrative new markets with its late-stage candidates, there's a good chance that Vertex will be flourishing for years to come.