It doesn’t get much better Pfizer(NYSE:PFE). The company continues to suffer from the significant decline in sales of its coronavirus products and the unimpressive financial results it has achieved over the past two years. And although Pfizer’s sales are growing again, that’s not enough for the drugmaker to get back into the good graces of investors.
Pfizer has undoubtedly made progress. Many new approvals and acquisitions have expanded the range and pipeline. However, it’s fair to wonder whether it’s worth waiting for the stock to bounce back rather than investing in some of Pfizer’s peers that are currently performing well. That said, let’s take a look at two stocks that are outperforming the market this year and might be worth investing in over Pfizer: Vertex Pharmaceutica(NASDAQ: VRTX) And Viking therapies(NASDAQ: VKTX).
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It’s been an eventful past twelve months for Vertex Pharmaceuticals. The drugmaker leads the market for drugs to treat cystic fibrosis (CF) – a rare disease that damages patients’ internal organs – and recorded major new approvals and clinical wins. In November 2023, Vertex announced that Casgevy has developed a gene-editing drug for two rare blood diseases CRISPR therapieshad been given the green light for the first time in Great Britain
It has since been approved in many other regions and countries, including the European Union, the US, Saudi Arabia and Bahrain. Elsewhere, Vertex Pharmaceuticals reported positive phase 3 results for a next-generation combination CF therapy and a potential drug for acute pain. Both could receive approval within a year.
Meanwhile, Vertex Pharmaceuticals continues to post strong financial results. In the third quarter, the company’s revenue rose 12% from a year earlier to $2.8 billion, and earnings per share of $4.01 were higher than the $3.97 reported in the same period last year. There are still 20,000 of the 92,000 patients in Vertex Pharmaceuticals’ target areas who are eligible for the CF drug but have not yet started treatment.
The company estimates another 58,000 patients for Casgevy – which costs $2.2 million per treatment course, at least in the US Vertex acute pain market that could run into the millions. In other words, the drugmaker’s existing lineup is still delivering solid growth and could sustain it for longer, even without help.
Still, it gets enough help, allowing Vertex to perform even better. We haven’t even mentioned the company’s pipeline, which includes several exciting candidates. Vertex Pharmaceuticals should continue to deliver excellent performance.
Viking Therapeutics was the surprise of the biotech industry this year. The company’s shares soared on its promising work on VK2735, a potential GLP-1 weight loss drug. Every investor in the company knows how lucrative these drugs have become lately, and this is just the beginning. Analysts predict that the market for obesity drugs will skyrocket in the coming years. Viking Therapeutics could be an underrated way to get in on the action.
The biotech proves that VK2735 wasn’t just a one-time event. Work is underway on a preclinical candidate that has shown promise in mice. Even if that program fails prematurely, Viking Therapeutics’ commitment to developing new weight loss therapies is clear, and the team has already achieved a number of crucial victories.
The company also has several other candidates in the pipeline. One of these is VK2809, an investigational drug for the liver disease metabolic dysfunction-associated steatohepatitis (MASH), which has also shown encouraging results in phase 2 trials. Viking’s VK0214 is a potential drug that just completed a Phase 1b trial for a rare disease called X-linked adrenoleukodystrophy, a genetic disorder that damages the nervous system.
The biotech sector is racing ahead with planned Phase 3 and Phase 2 studies. Positive results will cause the stock to rise again. Finally, Viking Therapeutics is an attractive target for larger drugmakers looking to delve into the lucrative weight loss market. While risks remain, the company is booming and could deliver outsized returns for patient investors.
Should investors buy shares of Vertex and Viking and ignore Pfizer? All three are worth serious consideration for those focused on the long game. Viking Therapeutics is the riskiest of the three, but also has the most upside potential.
If I had to pick just one, Vertex Pharmaceuticals would be my choice due to its strong offering, strong financial results, strong pipeline and proven innovative capabilities. Pfizer’s appeal is that it looks beaten and could be a bargain at current prices as it slowly but surely rebuilds its lineup.
Furthermore, it offers a reliable dividend yielding a juicy 6.5%, and it is the only one of the three to offer a payout. So don’t be too quick to dismiss Pfizer, but Viking Therapeutics and especially Vertex Pharmaceuticals may be a better buy at the moment.
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Prosper Junior Bakiny holds positions at Vertex Pharmaceuticals. The Motley Fool holds positions in and recommends CRISPR Therapeutics, Pfizer, and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.
Should You Forget Pfizer and Buy These Unstoppable Stocks Instead? was originally published by The Motley Fool
