Eli Lilly shares have soared more than 100% over the past year, bringing the company to a market value of more than $740 billion. Investors are excited about the pharma company because of its dominance in the billion-dollar weight loss drug market. Lilly sells two weight-loss drugs that, together, are bringing in billions of dollars in revenue, and demand for the products has even outpaced supply.
If you've missed out on Lilly's big gains, though, don't worry. You still can catch other opportunities thanks to the biotech and pharma industries' endless flow of innovation and product launches. These may fuel immediate as well as long-term share price gains. Let's check out two healthcare stocks with big catalysts on the horizon that could supercharge your portfolio right away and over time.
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1. Moderna
Moderna (MRNA 3.38%) today is known for its blockbuster coronavirus vaccine. That product, the company's one and only, helped the stock soar in earlier stages of the pandemic but, in more recent times, prompted investors to worry about future growth as demand for vaccination dropped.
The good news is Moderna may not be a one-product player for long. The company has a big catalyst coming up, with the U.S. Food and Drug Administration (FDA) set to decide on its respiratory syncytial virus (RSV) vaccine by May 12.
Though Pfizer and GSK already have commercialized their RSV vaccines, Moderna could have an edge for two reasons. First, the two big pharma companies reported cases of rare neurological condition Guillain-Barre syndrome in their clinical trials. Moderna didn't. So, healthcare providers may prefer the safety profile of the potential Moderna product.
And second, Moderna's investigational vaccine is the only one to come in a prefilled syringe format. This, too, could win over those who administer the vaccine because it cuts down on the potential for errors and speeds up the vaccination process. All of this means that, even though Moderna is later to market than Pfizer and GSK, it still could carve out significant share and even leadership.
The peak annual RSV market could be $10 billion, according to Moderna, so this vaccine may become a significant growth product for the biotech. And that makes now a great time to get in on Moderna, at the bargain level of 8.5 times forward earnings estimates.
2. Vertex Pharmaceuticals
Vertex Pharmaceuticals (VRTX -0.32%) doesn't just have one big catalyst around the corner: It has two. The biotech giant aims to submit two approval requests to the FDA by the middle of this year, one for a new cystic fibrosis (CF) treatment candidate and another for its investigational pain medication. Both of these have blockbuster potential.
Vertex already is known as the world's leader in CF treatment thanks to its drugs' top performance, extending patients' lives and quality of life. It already has the drugs and intellectual property to maintain this through the mid-2030s. Now, it may extend this by launching "the vanza triple," an investigational treatment that's even better than its current best-seller.
The big biotech also is expanding beyond this specialty, and through its clinical trials has shown it has what it takes to excel in other areas too. Vertex recently reported positive data from phase 3 trials of its non-opioid pain candidate, VX-548. The company aims to win a broad label for the treatment of moderate-to-severe acute pain, and later gain approval in chronic pain indications. This could be a huge opportunity because, today, pain treatments are limited to over-the-counter ones with limited efficacy or prescription opioids, which are linked to addiction.
The vanza triple and VX-548 could offer Vertex's already solid revenue growth a big boost. And that makes the shares, trading at 24 times forward earnings estimates today, look like a great deal.
