If I (Brian Feroldi here!) could rewind the clock a decade or so and invest in one growth stock, it would probably be Apple (NASDAQ:AAPL), as the iPhone maker's growth over the past 10 years has simply been astounding. The company's huge revenue and profit growth have resulted in share prices rising more than 13-fold over that time.
However, from here on out, the company's $600+ billion market cap is very likely to hinder its future growth rate, so investors who want a company that can put up some seriously stunning growth numbers will probably have to look elsewhere.
We asked our team of Motley Fool contributors to share a biotech stock that should have years of strong growth ahead of it. Read below to see if you agree with their suggestions.
The epicenter of Celgene's growth engine is cancer drug Revlimid. By continually expanding its label, Celgene has been successful at growing Revlimid's sales by close to 20% for several years in a row at this point. The best part is that this key revenue source has been growing mainly as a result of an increase in sales volume, not hefty price increases that may draw the ire of payers going forward.
Celgene has also wisely diversified its product portfolio over the years in order to broaden its revenue base. To this end, the company has worked diligently to expand the labels of its other cancer drug, Abraxane, and new anti-inflammatory medicine Otezla.
As it stands right now, Celgene is projected to generate a compound annual growth rate of 19% in terms of product sales and 23% for its earnings per share, up until 2020. While those numbers are impressive in their own right, and certainly top Apple's comparable figures moving forward, it's nothing compared to what this company may be able to achieve if everything goes according to plan.
Over the past year, Celgene has signed research partnerships with AstraZeneca and Juno Therapeutics in the emerging field of immuno-oncology that have the potential to generate multiple blockbuster products.
But what's even more exciting is Celgene's recent acquisition of Receptos -- which gave the biotech access to Ozanimod, an experimental drug indicated for relapsing multiple sclerosis. According to the company, Ozanimod could be approved by 2018 and is expected to see peak sales in the range of $4 to $6 billion.
All told, Celgene is already on track to produce industry-leading levels of growth with its current product portfolio, but its robust clinical program could produce staggering levels of growth that are rarely seen among large-cap pharma companies.
Regeneron markets top-selling Eylea, a drug for wet age-related macular degeneration and diabetic macular edema that racks up billions of dollars in annual sales. Although Eylea has already won coveted billion-dollar blockbuster status, there's still plenty of room to grow given that competitors Lucentis and Avastin also bring in billions of dollars in sales per year treating those conditions.
Last quarter, Regeneron's top line surged 50% higher year over year thanks to Eylea, but growth in the second half could accelerate further following the FDA's approval of Regeneron's second drug: Praluent.
In July, the FDA gave the green light to Regeneron and co-developer Sanofi to begin selling Praluent to help lower cholesterol in patients that have stubbornly high cholesterol levels. Cholesterol treatment is a massive market addressing millions of patients, and Praluent has a good chance of becoming a second billion-dollar seller for the company given that Lipitor, the top-selling cholesterol fighter, was posting sales north of $10 billion per year prior to losing patent protection in 2011.
If Eylea continues to steal away market share from Lucentis and Avastin, and Praluent outmaneuvers competitors, including newly-launched Repatha, then Regeneron's growth may make Apple envious.
Brian Feroldi: While plenty of small biotechs are growing their top lines faster than Apple, I want to recommend a biotech stock that is doing so while generating huge profits along the way. Investors who want both of those things should consider investing in rare disease drug maker Alexion Pharmaceuticals (NASDAQ:ALXN). Over the past five years, Alexion has grown its revenue and profits by 37% and 28%, respectively, which puts it ahead of the Mac maker on both fronts.
In the most recent quarter, Alexion grew its top line by 24% thanks to strong sales of Soliris, its treatment for rare diseases paroxysmal nocturnal hemoglobinuria and atypical hemolytic uremic syndrome, or PNH and aHUS. While this company has been a one-drug success story until now, that's about to change, and I think there are plenty of reasons to believe sales could accelerate from here.
The company recently announced not one, but two regulatory wins earlier this year that should help grow the company's top and bottom lines while reducing the company's risk profile by diversifying its revenue base.
These two new drugs, Kanuma and Stensiq, have been cleared for sale in Europe and are currently pending FDA approval in the United States. Each of these drugs fit nicely into the company's area of expertise -- treating ultra-rare diseases -- and analysts are expecting big sales from both. Strensiq sales are currently estimated to eventually top $1 billion annually, with Kanuma not far behind it at an estimated $700 million annual opportunity.
If all goes well with these two new drug launches, Alexion should be looking at years of continued fast growth in both its top and bottom lines, making it a great choice today for investors who are on the hunt for a fast-growing stock.
Brian Feroldi owns shares of Apple. George Budwell owns shares of Celgene and Juno Therapeutics. Todd Campbell owns shares of Celgene. The Motley Fool owns shares of and recommends Apple and Celgene. The Motley Fool recommends Juno Therapeutics. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.