There's no guarantee that any stock is completely unstoppable. However, three Motley Fool contributors think they've identified some that come close. Here's why they picked Eli Lilly (LLY +0.35%), Novo Nordisk (NVO 2.05%), and Vertex Pharmaceuticals (VRTX 1.34%).
Growing by leaps and Zepbounds
Keith Speights (Eli Lilly): Over the last 12 months, Eli Lilly's shares have skyrocketed close to 80% higher. Along the way, the company became the biggest drugmaker in the world based on market cap. I look for Lilly to keep its momentum going in 2024.
NYSE: LLY
Key Data Points
Lilly's lineup already included huge winners such as type 2 diabetes drugs Jardiance and Mounjaro, autoimmune disease drugs Olumiant and Taltz, and breast cancer drug Verzenio going into 2023. But in November, the company added what is likely to become its most successful product ever with the U.S. Food and Drug Administration's approval of Zepbound for chronic weight management.
Actually, Zepbound just might be on track to become the biggest-selling drug of all time for any pharmaceutical company. Analysts project that it and its sibling, Mounjaro, could combine for peak annual sales of more than $50 billion. (Zepbound and Mounjaro share the same active ingredient --- tirzepatide.) Roughly two-thirds of that peak sales total is likely to come from the weight-loss indication for which Zepbound is approved.
But Lilly still has other potential growth drivers that could add icing to the cake. Sales for its newer cancer drugs Retevmo and Tyvyt continue to pick up momentum. The company also hopes to soon win U.S. approval for donanemab in treating early-stage Alzheimer's disease. Morningstar predicts that donanemab will rake in sales of nearly $4.9 billion by 2027, if approved.
The only major impediment I see for Lilly is investors' perception of its valuation. Shares currently trade at a forward-earnings multiple of over 51. I think, though, that Lilly's longer-term growth justifies its seemingly premium price tag.
Novo Nordisk's stock is just getting warmed up
David Jagielski (Novo Nordisk): After a strong year in 2023 with its shares up nearly 53%, Novo Nordisk looks poised for another stellar performance in 2024. The company still isn't running out of growth opportunities as it is still in the relatively early stages of rolling out its injectable weight-loss drug, Wegovy, around the world.
NYSE: NVO
Key Data Points
The company is spending $6 billion to boost its production capacity to help meet the growing demand for Wegovy, a glucagon-like peptide 1 (GLP-1) agonist, which in trials has helped people lose an average of 15% of their body weight. Novo Nordisk is also working on a pill form which could be an even more popular option for patients.
Even amid all that growing demand, the company is still a global market leader, with Novo Nordisk estimating that its market share in the global GLP-1 segment is more than 54%. Patients have been using its diabetes drug Ozempic off-label as a treatment for weight loss, but with Wegovy potentially delivering even better results, there's plenty of runway for the stock to do even better this year as Wegovy becomes more widely available.
Novo Nordisk reported net sales of 166.4 billion Danish krone ($24.4 billion) over the first nine months of 2023, growing at a rate of 29% year over year, while the company's profit improved by 47%. With excellent margins and a lot more growth still on the way, 2024 could be another strong year for the stock.
There is plenty of upside left for this market beater
Prosper Junior Bakiny (Vertex Pharmaceuticals): Unstoppable is an adjective that describes Vertex Pharmaceuticals well. Over the past decade, the drugmaker has substantially outperformed the broader market. In fact, pick any time frame of a year or more in the past 10 years, and there is an excellent chance Vertex's performance is above average in the period. There's no secret behind the company's success.
NASDAQ: VRTX
Key Data Points
Vertex Pharmaceuticals is basically the only game in town for patients with a rare disease called cystic fibrosis (CF). It markets the only drugs in the world that address the underlying causes of CF. It has been the only therapeutic area in which Vertex sold medications in the last decade until recently, when, together with its partner, CRISPR Therapeutics (CRSP 1.41%), it earned approval for Casgevy.
This innovative gene-editing treatment targets sickle cell disease and beta-thalassemia, two rare blood disorders. Casgevy's potential is enormous, but Vertex Pharmaceuticals is still hard at work. In the next five years, it expects newer CF products, another that treats acute and neuropathic pain, and a potential repeat of its CF success in treating APOL1-mediated kidney disease, a condition for which there are no treatments that address the underlying causes.
That's not an exhaustive list of Vertex Pharmaceuticals' programs. Given the company's excellent track record, a lineup that can still drive solid top-line growth, and a pipeline that should lead to key approvals in the midterm, it's hard to imagine the company underperforming the market from here on out. Investors looking for an unstoppable stock need not look further: Vertex Pharmaceuticals is it.
