It's never easy to make a list of the "best" of anything, much less stocks to buy. People invest in equities based on various factors that are different from one person to the next and will determine what works for each.
With that said, Novo Nordisk (NVO 2.72%), Eli Lilly (LLY 0.87%), and Vertex Pharmaceuticals (VRTX 0.58%) look so attractive right now that they will likely appeal to a good swath of the investing world. Let's consider why investing $1,000 into any (or all) of these corporations would be an excellent move.
NYSE: NVO
Key Data Points
1. Novo Nordisk
Novo Nordisk has been grabbing headlines all year thanks to its work in developing and marketing diabetes and weight loss medicines such as Wegovy and Ozempic. Obesity is a worsening global health crisis, and the biotech stands at the forefront in combating it. With sales of anti-obesity drugs set to skyrocket, Novo Nordisk is poised to benefit in the years ahead.
Moreover, the company is seeking multiple important label extensions for its key therapies, including in treating kidney disease and nonalcoholic steatohepatitis -- which could add billions in revenue for Novo Nordisk. Further, the Denmark-based biotech giant has been seeking to diversify its lineup. It is developing medicines for various rare diseases, Alzheimer's, and several other conditions.
Novo Nordisk has crushed the market this year and with good reason. With an initial investment of $1,000, investors can get nine shares of the biotech at current levels with some money to spare. Or you could get three shares for about $311 and reserve the remainder for one of the stocks below. Either way, it'd be money well spent.
NYSE: LLY
Key Data Points
2. Eli Lilly
Eli Lilly is in the same boat as Novo Nordisk. It's a leader in the diabetes and obesity care markets and stands to benefit from the rapid increase in drug sales in these areas. However, Eli Lilly has a secret weapon. Its anti-obesity medicine, Zepbound (marketed as Mounjaro to treat type 2 diabetes), will arguably lead the pack. Sales of Zepbound could hit a peak of $25 billion, according to some analysts.
It could become one of the best-selling medicines in the history of the biotech industry. However, even beyond Zepbound and its other diabetes medicines, Eli Lilly's lineup is diversified. It has important immunology drugs in its arsenal, such as Taltz and the recently approved ulcerative colitis therapy, Omvoh.
In oncology, it markets Verzenio and the also newly approved Jaypirca. Perhaps most notably, Eli Lilly is now awaiting word from the U.S. Food and Drug Administration for donanemab, a potential medicine for Alzheimer's disease. Eli Lilly's financial results and stock performances have also been great all year long, and that shouldn't stop anytime soon.
The company's stock price has soared in recent years -- shares are changing hands for $569 apiece. Buying just one share could go a long way, provided investors hold onto it for a while and progressively add to their positions over time.
NASDAQ: VRTX
Key Data Points
3. Vertex Pharmaceuticals
Vertex Pharmaceuticals has long dominated the market for therapies that treat cystic fibrosis (CF), a rare disease that affects the lungs and other internal organs. The company's monopoly in this area has served it well, constantly catapulting its revenue and earnings to new heights. While its top-line growth rates have slowed over time, there remains plenty of work for Vertex in the CF area.
However, the company recently started a new chapter with the approval of Casgevy, which it developed with CRISPR Therapeutics. Casgevy is a gene-editing treatment for sickle cell disease and beta thalassemia. These two rare blood diseases have largely eluded the medical community. Casgevy undoubtedly boasts blockbuster potential, but it could be just the beginning.
Vertex plans on launching several more medicines in the next five years or so. The company's top-line growth rates should improve as it will no longer depend on its CF lineup to generate sales. Further, Vertex will also mitigate the risk, however remote, that some other biotech would come to challenge it in its core area of expertise. That's all great news for Vertex's future, and that's why it has also performed well this year.
At current levels, investors can get two shares of the biotech for less than $1,000.
