Sometimes, the laws of physics seem to apply to the stock market. That's especially the case when it comes to momentum. When certain stocks get a head of steam going, it's hard to slow them down.
With this in mind, we asked three Motley Fool contributors to identify unstoppable growth stocks to buy right now. Here's why they chose Eli Lilly (LLY 1.19%), Regeneron Pharmaceuticals (REGN -0.84%), and Vertex Pharmaceuticals (VRTX -0.06%).
This healthcare giant is only going to get bigger
David Jagielski (Eli Lilly): If you're looking for a top growth stock to buy, it's hard to find one that's more promising right now than Eli Lilly. The pharmaceutical company already has a stable, robust business that generates more than $28 billion in annual revenue but what's even more exciting are the growth opportunities that could soon be on the way.
Lilly's diabetes drug Mounjaro brought in nearly $1 billion in revenue last quarter. But that's just scratching the surface of its potential. If the Food and Drug Administration (FDA) approves it as a weight-loss treatment, which seems likely given that the drug has helped people lose nearly 27% of their body weight in clinical trials, this could soon become not just the company's best-selling drug but potentially the overall best-selling pharmaceutical drug ever.
Analysts struggle to predict how much revenue it might bring in at its peak just because of how many obesity-related illnesses it may help with. I've seen projections for $25 billion in annual revenue, $68 billion, and one even as high as $100 billion. The sky truly is the limit for Mounjaro. Eli Lilly having this drug in its portfolio makes the stock a slam-dunk buy.
Focusing too much on the healthcare stock's high earnings multiple of well over 70 would be a mistake, given the potential upside that Mounjaro possesses. It's not only a potential game changer for people looking to lose weight, but it could singlehandedly double or potentially triple Eli Lilly's top line.
If that's not enough growth potential to get you excited about the stock, then also consider that the company has an Alzheimer's treatment in donanemab that may soon obtain approval from regulators. That's another drug that could bring in billions.
Eli Lilly is worth close to $530 billion, but you should expect it to be much bigger once Mounjaro and donanemab get going. Even though the stock is up more than 50% this year, it's still not too late to add Eli Lilly to your portfolio.
Nowhere to go but up
Prosper Junior Bakiny (Regeneron Pharmaceuticals): Over the past year, Regeneron Pharmaceuticals delivered market-beating returns. The company partly owes this stock performance to solid financial results -- revenue and earnings have grown at a good clip.
Beyond Regeneron's excellent financial results, the company's pipeline is delivering important clinical and regulatory wins. Earlier this year, the biotech announced that one of its key growth drivers, eczema treatment Dupixent, had aced a late-stage study in treating chronic obstructive pulmonary disease (COPD). This will be an important indication assuming Regeneron and its partner, Sanofi -- which shares the rights to Dupixent -- manage to win approval for it.
And more recently, Regeneron earned approval for a high-dose formulation of Eylea, its blockbuster medicine for the treatment of wet age-related macular degeneration. Eylea is co-marketed with Bayer. Dupixent and Eylea have been doing most of the heavy lifting for Regeneron but have encountered issues. For instance, Eylea has been losing market share to a competing therapy called Vabysmo, marketed by Roche.
But the newer version of Eylea, with its less demanding dosing schedule, should help Regeneron fend off this threat, at least somewhat. The biotech has many other pipeline candidates that should lead to critical approvals in the coming years. Regeneron is still an excellent biotech growth stock for long-term investors, even as it has crushed the market of late.
A loaded pipeline
Keith Speights (Vertex Pharmaceuticals): I think Vertex Pharmaceuticals stands at a crossroads -- in a good way. The company's tremendous success so far has been due to its monopoly in treating the underlying cause of cystic fibrosis (CF). But Vertex could soon expand into new indications.
Vertex's pipeline is absolutely loaded with potentially huge winners. Exa-cel is poised to be first out of the gate. Vertex and its partner, CRISPR Therapeutics, await two FDA approval decisions over the next few months for the gene-editing therapy. If approved, exa-cel seems likely to top $1 billion in annual sales by 2028.
The big biotech expects to announce results from a late-stage study of VX-548 in treating acute pain by either late 2023 or early 2024. This drug also could easily become a blockbuster if it ultimately wins regulatory approval. VX-548 isn't an opioid, which could make it very attractive to both physicians and patients.
Looking a few years down the road reveals that Vertex could have a drug that treats APOL1-mediated kidney disease on the way. The indication affects more patients worldwide than CF does.
However, Vertex still has plenty of growth opportunities ahead in CF. The company plans to report data early next year for its most powerful CF therapy so far, its vanzacaftor triple-drug combo. Because the combo has lower royalties, it could become Vertex's most profitable CF therapy ever as well.
