It’s often challenging to decide which stocks to invest in. However, some companies look too attractive to pass up. We asked three Motley Fool contributors to pick slam-dunk growth stocks investors can confidently add to their portfolios. They chose three famous drugmakers: Eli Lilly (LLY -4.73%), Amgen (AMGN 2.21%), and Vertex Pharmaceuticals (VRTX 0.53%). Read on to discover why.
One of the top growth stocks in the industry
Prosper Junior Bakiny (Eli Lilly): What’s considered excellent revenue growth depends on the industry. For pharmaceutical companies, especially those with a market cap above $50 billion, year-over-year top-line increases in the high-single-digit percentages are already pretty strong. With that context in mind, consider that Eli Lilly’s revenue growth has not dipped below 20% since mid-2023.
LLY Operating Revenue (Quarterly YoY Growth) data by YCharts
The company is firing on all cylinders, largely thanks to its work in the diabetes and obesity markets. Eli Lilly’s medicines, such as Mounjaro and Zepbound, are racking up incredible sales, and they are still on an upward path. Further, other recent launches should soon contribute to the drugmaker’s results, which will help it deal with the mounting competition in its core area of expertise. Perhaps Eli Lilly’s most promising recent approval is Kisunla, an Alzheimer’s disease treatment.
Despite an aging population, few medicines in this field have earned the green light from regulators in the past two decades. So, there is a vast unmet need here. Enter Kisunla, which should easily crack blockbuster status at its peak. But that’s not all. From Eli Lilly’s other recent launches, such as cancer medicine Jaypirca, to exciting pipeline candidates like Retatrutide — a potential next-gen anti-obesity medicine — not to mention a steady and growing dividend, Eli Lilly has much to offer growth and income-oriented investors.
The company remains a strong buy despite not performing in line with the market in the past six months.
A big biotech company with multiple growth opportunities
Keith Speights (Vertex Pharmaceuticals): Vertex Pharmaceuticals doesn’t just have one path to growth. This big biotech company has multiple growth opportunities. And those opportunities are big ones.
Vertex achieved tremendous success with its cystic fibrosis (CF) therapies. The company still has plenty of room to grow in the CF market, especially with its recently approved drug Alyftrek. Not only is Alyftrek more effective than Vertex’s top-selling Trikafta, but it also has a more convenient once-daily dosing. In addition, Vertex’s royalty burden is lower with Alyftrek than with its older CF therapies.
Gene-editing therapy Casgevy has been approved for over a year in treating sickle cell disease and transfusion-dependent beta-thalassemia. Sure, it only generated revenue of $8 million in the fourth quarter of 2024. However, Vertex still thinks Casgevy has multibillion-dollar potential as its commercial launch ramps up.
I’m especially optimistic about the prospects for Vertex’s new pain drug Journavx. Its U.S. Food and Drug Administration (FDA) approval in January 2025 marked the first U.S. approval of a non-opioid pain therapy in more than 20 years. I predict Journavx will become a blockbuster drug sooner than Casgevy.
Vertex’s growth prospects look even better when we factor in its late-stage pipeline programs. The company hopes to win another indication for Journavx in treating painful diabetic peripheral neuropathy. It has two candidates in phase 3 testing targeting kidney diseases: inaxaplin for APOL1-mediated kidney disease and povetacicept for IgA nephropathy. Vertex could even cure severe type 1 diabetes with zimislecel.
Magnificent growth stock? I think Vertex Pharmaceuticals is definitely worthy of the description.
Amgen is a top growth stock with a lot of potential in the GLP-1 market
David Jagielski (Amgen): One pharma stock that hasn’t gotten much love of late is Amgen. Although it’s a beast in the healthcare industry, with a market cap of more than $165 billion, investors may be overlooking the potential upside it possesses, specifically in the GLP-1 weight loss market.
Investors dumped the stock late last year because its once-per-month injection, MariTide, fell short of analyst expectations as it helped people lose only 20% weight in a phase 2 trial — analysts were expecting 25%. However, the silver lining is that there was no plateau and some people in the clinical trial took it less frequently than once per month; it’s possible that greater weight loss may be attainable with the treatment.
A stock with a promising GLP-1 treatment can sometimes trade at a premium, and yet, for Amgen, it’s trading at just 15 times next year’s estimated earnings (based on analyst projections), making it a potential bargain buy. That’s not a bad deal for a stock which also pays a dividend that yields more than 3% and which grew its top line by 19% in 2024, to $33.4 billion.
The company has been growing its business via acquisitions in recent years and with a promising pipeline which features dozens of phase 3 trials, this makes for a potentially underrated growth stock to hang on to for the long haul.
David Jagielski has no position in any of the stocks mentioned. Keith Speights has positions in Vertex Pharmaceuticals. Prosper Junior Bakiny has positions in Eli Lilly and Vertex Pharmaceuticals. The Motley Fool has positions in and recommends Vertex Pharmaceuticals. The Motley Fool recommends Amgen. The Motley Fool has a disclosure policy.