Two healthcare stocks to be bought and held in 2021:When choosing a health care stock that can hold for ten years, I am looking for income growth in ten years or more, and the recent profitability is also important. If the company is in the clinical stage, we can accept losses due to investment growth. If the company has at least some commercial products, we hope to see profits now, or a road to the future.
I chose two well-known enterprises with good revenue and profit records. Both of them have new products that will promote sales for many years in the future. Let’s take a closer look.
Vertex pharmaceuticals manufactures four commercially available drugs for the treatment of cystic fibrosis (CF). The latest is trikafta approved by the U.S. Food and Drug Administration (FDA) in October 2019. Vertex is a top participant in this field. But there is better news: the company hopes to maintain its market leadership until at least the late 2030’s.
According to vertex’s guidelines, CF drugs may bring the company $6.2 billion in product revenue in 2020. Morningstar research predicts that this figure may exceed $10 billion in 2028.
At the same time, vertex is preparing for the future, which means expanding its treatment field. So far, it has been related to pain, blood diseases, lung and liver diseases α- 1 anti trypsin deficiency program was introduced into human trials. Among them, the most advanced is phase 2 research. According to stat news, the company said at the JPMorgan medical conference that it was ready to recruit mid-term and late-term candidates. Considering that vertex has a lot of cash and growing revenue, it is in a solid position.
The company has more than $5.3 billion in cash and cash equivalents, the highest level ever. Revenue in 2019 exceeded $4 billion, a record.
CF alone can generate billions of dollars in revenue for vertex over the next 20 years. The company said at the JPMorgan conference that its drugs can now treat up to 83000 people worldwide, higher than the earlier estimate of 75000 people, so vertex still has time to find the treatment areas to win in the future.
Everyone is talking about the role of Abbott Laboratories in the new coronavirus test. FDA has granted emergency use authorization to Abbott’s eight COVID-19 tests. So far, the company has earned more than $1 billion, but it is too early to say whether these tests will become one of Abbott’s lasting revenues. Even though the sale of COVID-19 test has finally decreased, Abbott has many products that can increase revenue. Its business includes diagnosis, medical equipment, nutrition and medicine.
Last year, regulators in the US and Europe approved the next generation of Abbott’s star products for the FreeStyle Libre continuous glucose monitoring system for diabetes. In the third quarter of last year, sales of FreeStyle Libre increased by more than 37%. In the fourth quarter, sales of the entire diabetes care business increased by more than 26%.
European regulators recently approved the fourth generation mitraclip, which is the world’s leading minimally invasive mitral valve repair device. The United States has processed this latest version in 2019.
Recently, Abbott announced that FDA approved its traumatic brain injury blood test, which is the first rapid palmtop blood test to detect concussion. According to a paper on the website of the National Institutes of health, about 5 million people go to the emergency room every year because of concussion in the United States. Abbott’s revenue and profits have increased in the past two years, and its future prospects are also bright. It is estimated that the revenue of this financial year is rising.
I will not buy vertex and Abbott in the short term. The products of these healthcare companies will increase revenue in the next few years. Vertex and Abbott’s best strategy is to buy immediately and hold it for at least ten years.