Forget NVO and consider buying VRTX instead
$Novo-Nordisk A/S(NVO)$ is currently in one of the best periods in its history. Its drugs Ozempic and Wegovy are now household names. The company's sales and profits are soaring, and its stock price has climbed about 150% over the past three years.
Some investors who haven't yet bought NOV might now be thinking about jumping on the bandwagon. But another option is to skip NOV and invest in another standout pharmaceutical stock.
Different in Several Ways
$Vertex Pharmaceuticals(VRTX)$ is quite different from NOV. Vertex has a market cap of $126 billion, while NOV's market cap is over $450 billion.
Their product portfolios also look very different. NOV sells drugs for diabetes, obesity, growth disorders, hemophilia, and hormone replacement. Vertex, on the other hand, currently makes all its revenue from therapies for cystic fibrosis (CF), a rare genetic disease.
However, CF isn’t Vertex's only focus. The company is pushing forward with Casgevy, the first FDA-approved CRISPR gene-editing therapy. Casgevy is a one-time treatment for two rare blood disorders—sickle cell disease and transfusion-dependent β-thalassemia.
Potential Future Rivals
NOV and Vertex don’t compete right now, but that might change. The first clash could come in the treatment of sickle cell disease. NOV is running late-stage clinical trials for etavopivat, a drug for this condition.
But the biggest future competition might be in the type 1 diabetes market. NOV sells several insulin products, including Fiasp, Levemir, and Tresiba. The company is also working on a cell therapy that could one day cure type 1 diabetes.
However, Vertex is ahead in this race. It already has two potential cures for type 1 diabetes in early-stage testing.
Vertex also has several growth drivers. The company is awaiting FDA approval for vanzacaftor, which could be its most powerful CF therapy yet. Another promising late-stage candidate is inaxaplin.
Vertex’s price-to-earnings growth ratio (PEG) is 0.79, far below NOV’s 2.4. Vertex's growth potential hasn’t been fully reflected in its stock price yet. Vertex’s best days might still be ahead.
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