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The healthcare industry has proven to be a surprisingly resilient place for investors. Generally, the types of products and services provided by companies in this sector are consistently in demand. As a result, these businesses are often much less susceptible to economic fluctuations than other industries.
That’s not to say that healthcare companies haven’t felt the volatility of the past few years, but there are notable differences in the performance of many of these companies that may attract investors looking for stable long-term returns.
If you have $1,000 to invest that you can safely leave alone for at least a few years, here are two such names to consider.
1. Vertex Pharmaceuticals
vertex pharmaceuticals (NASDAQ:VRTX) Although not a household name, it has made significant strides in disrupting standard treatments for multiple diseases in a substantial addressable market. The company has long been known for its cystic fibrosis drug, which is the only drug approved to treat the underlying cause of this genetic disease.
Most recently, Vertex added a new product to its portfolio with the approval of CRISPR-based therapy Casgevy. Developed in partnership with Vertex. CRISPR TherapeuticsIt also has the potential to treat both sickle cell disease and transfusion-dependent beta-thalassemia.
Kasgevy has been approved in the US, UK, Saudi Arabia and Bahrain, and is awaiting approval with European Union regulators. Vertex is also awaiting approval for Kasugevy in Switzerland, and plans to seek approval for the drug in Canada in the first half of this year.
Looking at Vertex’s very promising pipeline, there are a number of potential blockbusters on the horizon. One is a non-opioid candidate for acute pain called VX-548. The drug has shown great promise in multiple clinical settings, including surgical and non-surgical pain, giving it disruptive potential across a wide range of addressable markets.
The company is also advancing several promising candidates into early-stage clinical trials. One is myotonic dystrophy, a type of muscular dystrophy that affects about 110,000 people in Europe and North America, but there is no approved treatment.
The other is a treatment for autosomal dominant polycystic kidney disease (ADPKD), which affects more than 250,000 patients in the United States and Europe alone. There is currently no cure for ADPKD. The current standard of care for most patients is either dialysis or kidney transplantation.
Vertex has the financial strength to infuse billions of dollars in profits and revenue each year, while also looking toward the future of the rare disease drug market. This is a stock worth owning for the long term.
2. Regeneron Pharmaceuticals
Regeneron Pharmaceuticals (NASDAQ:REGN) is a biotech primarily known for two blockbuster drugs. The first is his Dupixent, developed and marketed by the company. sanofi. The other is Eylea, with whom we share distribution rights. bayer.
Dupixent is approved as a treatment for several conditions, including moderate to severe atopic dermatitis, a chronic skin condition called prurigo nodularis, and as an add-on treatment for moderate to severe asthma. Eylea is also approved for a variety of conditions, including diabetic retinopathy and wet age-related macular degeneration.
Existing Dupixent patent exclusivity will continue until the beginning of the next decade, but approval of new indications could further extend the drug’s revenue potential. For example, Regeneron is currently seeking approval for Dupixent to treat patients with chronic obstructive pulmonary disease (COPD) and type 2 inflammation.
COPD patients with type 2 inflammation account for 20% to 40% of all COPD patients. Expanding Dupixent’s indication for this disease will open up a new accessible market of approximately 300,000 people.
COPD affects approximately 12 million people in the United States alone. last year, evercore Adding COPD to Dupixent’s approved indication could push the drug’s sales to more than $20 billion a year by the end of this decade, analyst Josh Simmer wrote in a note.
And while Eylea was scheduled to lose patent exclusivity last year, Regeneron’s filing of multiple ancillary product patents means the company’s last patent won’t expire until 2040.
Dupixent achieved total global sales of $12 billion in 2023, an increase of 33% from 2022. Meanwhile, Eylea’s US product sales were $5.7 billion during his 12-month period. Iry HD, a higher-dose version of the drug approved last year, brought in $166 million in sales in the U.S. last year.
Looking at Regeneron’s 2023 financial performance, sales were $13 billion and bottom line profit was $4 billion. Net income was down single digits year-on-year, but revenue was up 8% from a year ago.
Another driving force behind Regeneron’s 2023 results was the cancer drug Libtayo, also developed in partnership with Sanofi. Ribtayo’s global sales in 2023 were $869 million, an increase of 50% from the previous year.
The biotech stock returned approximately 133% in total over the subsequent five years. This is about 30% more expensive than the biotech company’s stock. S&P500will also return in the same time frame. Regeneron is not a flash-growth stock. But its stable earnings, continued profitability, and overall promise of current and potential products make it a no-brainer buy for long-term healthcare investors.
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Rachel Warren has no position in any stocks mentioned. The Motley Fool has positions in and recommends CRISPR Therapeutics and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.
2 Top Growth Stocks to Buy Now for $1,000 was originally published by The Motley Fool
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