Does a 100% return in less than seven years sound pretty good? Most investors would probably say so. But which stocks are good candidates to achieve such a gain?
Three Motley Fool contributors think they've found magnificent stocks that could double or more by 2030. Here's why they picked CRISPR Therapeutics (CRSP 1.65%), Eli Lilly (LLY -0.10%), and Viking Therapeutics (VKTX 0.81%).
A ton of upside for CRISPR Therapeutics in the long run
David Jagielski (CRISPR Therapeutics): A promising stock that has a lot of runway for future growth is CRISPR Therapeutics. Its market cap is around $5.1 billion today, but it's not hard to see how it could surge to more than $10 billion by the start of the next decade.
The healthcare company is in the early stages of its growth, as the Food and Drug Administration (FDA) recently approved a gene therapy it's been working on with its development partner, Vertex Pharmaceuticals; this is the first approved treatment in CRISPR Therapeutics' portfolio. And the FDA granted the treatment approval for not just one but two indications. Casgevy treats transfusion-dependent beta-thalassemia and sickle cell disease -- two types of blood disorders. The treatment is a functional cure for both, and is such a game changer for people with these illnesses that healthcare experts say it's cost-effective even with a price of more than $2 million per treatment.
There are two ways I can see CRISPR Therapeutics' valuation doubling by 2030. One is through sheer organic growth. While the company will share in the profits of Casgevy with Vertex, it also has other gene-therapy treatments in development. But with such a high price tag for Casgevy, the profits alone on that treatment could be substantial, and potentially provide a path for the company to achieve profitability (last year it incurred a net loss of $153.6 million). Analysts believe that at its peak, Casgevy could generate close to $4 billion in annual revenue.
The other path is via acquisition. Many healthcare companies are growing increasingly interested in gene therapy, and since CRISPR Therapeutics is gaining a reputation in the industry, it could become a potential acquisition target. The company has no long-term debt on its books and has more than $2 billion in cash, which could sweeten the deal for a potential acquirer. Assuming its financial position remains this strong, CRISPR Therapeutics could become a highly coveted company, if it isn't already.
It looks to have a bright future ahead. CRISPR Therapeutics is a stock that certainly has the potential to double by 2030.
The first trillion-dollar healthcare stock?
Prosper Junior Bakiny (Eli Lilly): Size matters on the stock market: Smaller companies tend to have much more upside than larger ones. So it may not be the most obvious choice to pick a huge corporation like Eli Lilly -- with a market cap of $725 billion -- to double in the next six years or so. But it's a good one nonetheless. Eli Lilly has been on fire recently, delivering many significant clinical and regulatory breakthroughs. It remains one of the undisputed leaders in the large market for diabetes medicines.
The pharmaceutical company is also establishing itself in the fast-growing weight-loss area thanks to Zepbound, a medicine that was granted the green light late last year; expect the drug to be a significant growth driver for years. It won't be the only one: Eli Lilly's portfolio is diversified, with exciting treatments and candidates across oncology, immunology, and neuroscience.
Lilly is currently awaiting approval for another potential blockbuster, donanemab, a medicine for Alzheimer's disease (AD). This area has been called a graveyard for investigational drugs, since the overwhelming majority of attempts to develop novel AD therapies have been unsuccessful. While Eli Lilly still has a crucial regulatory obstacle to get through to earn approval for donanemab, things are looking promising for the pharmaceutical giant.
However, Lilly's prospects don't depend on a single approval or rejection. The company should be able to deliver outstanding top- and bottom-line growth through 2030, regardless of what happens with donanemab. The drugmaker is likely to become the first healthcare stock to crack the $1 trillion mark -- and continue growing long after. Despite its size, Eli Lilly could double or more in the next six years.
A small biotech that should grow much larger
Keith Speights (Viking Therapeutics): You can look at Viking Therapeutics in a couple of ways. Some might view it as ridiculously expensive for a clinical-stage biotech because of its market cap of nearly $8 billion. Others could see Viking as a rising star that could grow much larger. I'm firmly in the second camp.
Viking's shares have skyrocketed this year thanks to two positive pipeline updates. In late February, the company announced fantastic results from its phase 2 study of the injectable version of obesity drug VK2735. A month later, Viking reported promising data from a phase 1 study evaluating an oral formulation of the drug.
Goldman Sachs predicts that the global obesity-drug market could top $100 billion by 2030. Viking appears to be in a good position to capture a sizable chunk of that market with VK2735, assuming there aren't any issues with its late-stage testing of the drug.
The company also has another potentially huge winner in its pipeline with VK2809. Viking expects to announce histology results from a phase 2b study of the drug in treating nonalcoholic steatohepatitis (NASH) and fibrosis in the first half of 2024. The biotech reported positive top-line results from the study in the second quarter of 2023.
NASH, also known as metabolic dysfunction-associated steatohepatitis (MASH), is another huge market opportunity for Viking. Estimates vary for just how big the NASH/MASH market will grow, but some analysts think it could also top $100 billion by 2030.
With two promising candidates targeting two enormous markets, I think Viking stock could double well before the end of the decade. I also suspect the company will be a prime acquisition target in the near future.
