Things aren’t getting much better for Pfizer(NYSE: PFE). The company is still suffering from the significant drop in sales of its coronavirus products and the less-than-impressive financial results it has produced during the past two years. And although Pfizer’s revenue is growing again, that’s not enough for the drugmaker to get back in the good graces of investors.
Pfizer has, unquestionably, made progress. Many new approvals and acquisitions have expanded its lineup and pipeline. However, it’s fair to ask whether it’s worth waiting for the stock to bounce back instead of investing in some of Pfizer’s peers that are performing well right now. With that said, let’s consider two stocks outpacing the market this year and might be worth investing in over Pfizer: Vertex Pharmaceuticals(NASDAQ: VRTX) and Viking Therapeutics(NASDAQ: VKTX).
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It has been an eventful past 12 months for Vertex Pharmaceuticals. The drugmaker leads the market for drugs to treat cystic fibrosis (CF) — a rare disease that damages patients’ internal organs — registered important new approvals and clinical wins. In November 2023, Vertex announced that Casgevy, a gene editing medicine for two rare blood diseases developed with CRISPR Therapeutics, had earned its first regulatory green light in the U.K.
It has since been approved in many other regions and countries, including the European Union, the U.S., Saudi Arabia, and Bahrain. Elsewhere, Vertex Pharmaceuticals reported positive phase 3 results for a next-gen combination CF therapy and a potential medicine for acute pain. Both could earn 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 was up from the $3.97 reported in the year-ago period. There are still 20,000 patients out of 92,000 in Vertex Pharmaceuticals’ targeted territories who are eligible for its CF medicine but have yet to start treatment.
The company estimates another 58,000 patients for Casgevy — which costs $2.2 million per treatment course, at least in the U.S. Vertex’s addressable market in acute pain could number in the millions. In other words, the drugmaker’s existing lineup is still driving solid growth and could do it for longer, even without help.
Yet, it is getting plenty of help, allowing Vertex to perform even better. We haven’t even mentioned the company’s pipeline, which features several exciting candidates. Vertex Pharmaceuticals should continue delivering excellent performances.
Viking Therapeutics has been the surprise of the biotech industry this year. The company’s shares soared because of its promising work on VK2735, a potential GLP-1 weight loss medicine. Every investor in the business knows how lucrative these drugs have become recently, and it’s just the beginning. Analysts predict that the anti-obesity medicine market will skyrocket in the coming years. Viking Therapeutics could be an underrated way to get in on the action.
The biotech is proving that VK2735 wasn’t just a one-off. It is working on a preclinical candidate that has shown promise in mice. Even if that program fails early, Viking Therapeutics’ commitment to developing novel weight loss therapies is clear, and its team has already notched some crucial wins.
Further, the company has several other candidates in its pipeline. One is VK2809, an investigational medicine for the liver disease metabolic dysfunction-associated steatohepatitis (MASH) that has also produced encouraging results in phase 2 studies. Viking’s VK0214 is a potential medicine 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 is racing ahead with planned phase 3 and phase 2 studies. Positive results will send its stock soaring once again. Lastly, Viking Therapeutics is an attractive target for larger drugmakers looking to dip their toes in the lucrative weight-loss market. While risks remain, the company is flying high and could deliver outsize returns to patient investors.
Should investors purchase 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 most risky of the three, but it also has the most upside potential.
If I were to pick just one, Vertex Pharmaceuticals would be my choice thanks to its strong lineup, strong financial results, strong pipeline, and proven innovative abilities. Pfizer’s appeal is that it looks beaten-down and might be a steal at current prices since it is slowly but surely rebuilding its lineup.
Further, it offers a reliable dividend that yields a juicy 6.5%, and it’s the only one of the three that offers a payout. So, don’t be too quick to ignore Pfizer, but Viking Therapeutics and especially Vertex Pharmaceuticals might be better buys right now.
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Prosper Junior Bakiny has positions in Vertex Pharmaceuticals. The Motley Fool has positions in and recommends CRISPR Therapeutics, Pfizer, and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.
