Invest in Two Promising Pharmaceutical Companies to Secure Long-term Profits
If you're too swamped to continuously monitor your investment portfolio, then investing in stocks that won't give you grey hairs later is a must. To accomplish this, finding reliable businesses on an upward trajectory is crucial.
Two companies that have been attracting attention in the past two years due to their advancements in the weight loss therapy field are Eli Lilly (-1.38%) and Novo Nordisk (-0.32%). Both have long-standing reputations in the pharmaceutical industry and have delivered impressive returns for decades. Moreover, these healthcare giants seem likely to have ample growth potential left, making them a wise investment option for the long term.
1. Eli Lilly
Eli Lilly continues to make strides. Its popular weight loss medication, Zepbound (tirzepatide), recently became the first to receive approval from the Food and Drug Administration as a treatment for moderate to severe obstructive sleep apnea in adults with obesity. Zepbound's sales were already growing rapidly. Its approval in this new indication should boost the medicine's performance further, and it's pursuing additional label expansions. Eli Lilly can also anticipate several years of sales growth from its diabetes medication Mounjaro (the same underlying compound, but under a different brand name, tirzepatide).
In the third quarter, Eli Lilly's sales increased by 20% year over year to $11.4 billion, primarily due to Zepbound and Mounjaro. However, the company's portfolio is versatile. Newer products such as Kisunla, an early-stage treatment for Alzheimer's disease, will eventually contribute to the company's financial success. Eli Lilly's product lineup appears robust enough for the company to post positive financial results for the foreseeable future.
Beyond that, Eli Lilly has a robust pipeline. Its weight loss candidates, including retatrutide, show promise. It's also working on a once-weekly insulin product. Beyond its core indications, Eli Lilly is developing new drugs in oncology, immunology, and rare diseases. Its investigational gene therapy for genetic deafness looks particularly promising.
For investors, Eli Lilly boasts an excellent dividend program. With its recent dividend increase, management has now tripled its dividend over the past decade.
So, Eli Lilly offers strong growth and dividends for patient investors. While the company's current medications are garnering headlines, its true strength lies in its capacity to develop newer and better ones, as it has done for years. Eli Lilly should continue to do so and deliver excellent returns to investors.
2. Novo Nordisk
Novo Nordisk's shares recently fell by nearly 20% following their less-than-impressive results from a phase 3 study of a new weight loss drug candidate. However, this setback does not significantly affect Novo Nordisk's overall prospects.
Novo Nordisk's investigational weight loss therapy, CagriSema, combines semaglutide (the active ingredient in Wegovy) with an additional appetite suppressant, cagrilintide. Patients in the study taking CagriSema experienced a mean weight loss of 22.7% after 68 weeks, compared to 16.1% for those on semaglutide alone and 2.3% for those taking a placebo. Despite investors' disappointment for missing Novo Nordisk's management's predicted 25% mean weight loss for CagriSema, it still seems that the company has an improved product in its hands.
CagriSema is just one of several promising weight loss programs in Novo Nordisk's pipeline, and it should be superior to Eli Lilly's rival drug, Zepbound (which led to a mean weight loss of 20.2% in a 72-week phase 3 study). Novo Nordisk remains a leader in the diabetes care market, holding a 33.9% share as of August, up from the 33.3% it held a year prior. It's unlikely to relinquish its strong position in this area anytime soon, given its solid pipeline in that niche. Moreover, despite increased competition, the company is diversifying.
Novo Nordisk is developing therapies across many other indications beyond those that its GLP-1 drugs could target. For instance, it is working on medicines for sickle cell disease and beta-thalassemia, two rare blood disorders. In summarizing, despite its recent share price dip, Novo Nordisk remains an excellent stock to hold onto for decades. If anything, that setback presents an excellent opportunity to buy.
- Given Eli Lilly's current financial performance and promising pipeline, such as its weight loss candidate retatrutide and investigational gene therapy for genetic deafness, it's clear that this company is not only a wise investment for the long term but also offers attractive dividends for patient investors.
- Despite Novo Nordisk's recent dip in share price due to less-than-impressive results from a phase 3 study of its weight loss drug candidate, the company's strong position in the diabetes care market and diverse pipeline, including therapies for rare blood disorders, make it an appealing long-term investment opportunity.
