Vertex Pharmaceuticals (VRTX +0.64%) and Pfizer (PFE 0.87%) are both among the largest drugmakers in the world. The latter currently has the edge in this department, with a market cap of $141 billion compared to the former's $109 billion. However, Vertex has a significantly better medium-term outlook and could surpass its larger peer in the next five years.
Pfizer's issues
Pfizer's financial results haven't been great in the past couple of years, as its pandemic-related products are no longer the growth drivers they once were. The company will also encounter some critical patent cliffs by 2030. One of them will be for Eliquis, an anticoagulant that is one of its top-selling medicines; its cancer medicine Xtandi and pneumonia vaccine Prevnar 13 will encounter the same fate. Pfizer is likely to experience at least a few more years of slow sales growth due to these obstacles.
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Vertex's prospects
Meanwhile, Vertex Pharmaceuticals should maintain strong revenue growth through this entire period. First of all, the company remains the leader in the market for cystic fibrosis (CF), and the only major player with medicines that treat its root causes. Despite making significant headway in this area over the past decade, Vertex Pharmaceuticals has plenty of white space left.
And Vertex doesn't have to worry about patent cliffs in the next five years. The company's most important CF products, Alyftrek and Trikafta, won't lose patent exclusivity until the late 2030s.
NASDAQ: VRTX
Key Data Points
Additionally, Vertex Pharmaceuticals' new launches should experience strong growth in the next five years. One of them is Journavx, a non-opioid medicine for acute pain. Then there's Casgevy, a gene-editing therapy for two rare blood disorders.
Vertex should earn other important approvals through 2030 that could jolt its stock price. It's developing a treatment called zimislecel for type 1 diabetes (T1D), and the therapy is showing the ability to restore patients' insulin production in clinical trials.
The company's late-stage pipeline also features products like inaxaplin, which is being developed to treat APOL-1 mediated kidney disease, a condition with no current treatment options that target its underlying causes. Between new launches and a strong lineup that generates consistent revenue and profits, Vertex Pharmaceuticals should perform much better than its larger counterpart.
NYSE: PFE
Key Data Points
Should investors give up on Pfizer?
Pfizer is working on developing new medicines that could help it overcome its challenges. It has a deep pipeline with promising programs in weight management and oncology. The drugmaker also has newer products whose sales should increase. And as Pfizer starts posting significant clinical wins, its stock could bounce back.
That, combined with its solid dividend and reasonable valuation, still makes Pfizer attractive for income-seeking investors willing to hold the stock well beyond the next five years. However, between now and 2030, Vertex Pharmaceuticals will likely be the far better performer of the two, and overtake Pfizer's market cap.
