Forget Moderna Stock, This is a Much Better Buy

Investors flocked to Moderna (NASDAQ: MRNA) stock in the early days of the pandemic for one big reason: The company sold one of the world's most-needed products, a coronavirus vaccine. The vaccine brought in billions of dollars of revenue, and with this first product, Moderna went from a clinical-stage biotech to a highly profitable commercial-stage company in a matter of months.

Though Moderna stock soared back then, in more recent times, the stock has stumbled. The company has seen vaccine sales decline, and its second big product -- its respiratory syncytial virus (RSV) vaccine -- hasn't performed as well as expected when it comes to delivering growth. Still, Moderna has made progress on cost cuts and has refocused its pipeline on several promising programs. And investors may be taking notice. The stock has climbed more than 30% over the past month.

But, if you're looking to invest in a surefire biotech winner, forget Moderna stock. The following player is a much better buy...

Image source: Getty Images.

Why skip Moderna?

So, first, why should you turn away from Moderna right now? The biotech offers a promising recovery story and potentially a long-term growth story too, but it involves some risk: It still must reach certain goals, such as cash breakeven in 2028 or the launch of new products over the next few years. This means Moderna may not be the best choice for cautious investors.

But, Vertex Pharmaceuticals (NASDAQ: VRTX) is a biotech player that's suitable for both cautious and aggressive investors right now. The company has a long track record of earnings growth thanks to its leadership in cystic fibrosis (CF) treatment -- it's No. 1 worldwide in this area. The company transformed the treatment of this disease with its CFTR modulators, which correct a faulty protein made by the CFTR gene.

Vertex's latest CFTR modulators, Trikafta and Alyftrek, approved in 2019 and in 2024, respectively, treat nearly 95% of those with CF -- and Vertex is working on a candidate to treat this remaining percentage of the CF population that can't be helped by these drugs. Importantly, Vertex's intellectual property protects its position in this market through the late part of the next decade.

Vertex's CF drugs are bringing in billions of dollars in sales -- for example, the company's total revenue climbed 11% to more than $3 billion in the latest quarter -- and this momentum is very likely to continue due to the strength of the CF products.

Winning approval for new products

On top of this, in recent years, Vertex has expanded into other treatment areas and won approval for Casgevy for blood disorders and Journavx for pain management. Both of these could add billions of dollars to Vertex's top line in the coming years. Journavx could become a particularly big product as it fills a major need: Painkillers generally are either over-the-counter options that may not be effective in certain cases or prescription opioids, which have been linked to addiction. Journavx offers doctors and patients an effective, non-opioid option, and so far, they've been receptive. From March, when it became available, through the middle of October, more than 300,000 Journavx prescriptions were filled.

Vertex also has a pipeline including both CF and other candidates that should fuel growth further down the road.

Now, let's take a look at share performance and valuation. Vertex stock has climbed almost 100% over the past five years, and this year it's gained about 15%, showing that it's been a winner in the long term and in the short term. As for valuation, Vertex trades for 25x forward earnings estimates, down from about 27x a few months ago -- today's price may not be dirt cheap, but it's a reasonable price to pay for a company with such leadership in its specialty area and a broadening portfolio of products.

Of course, Vertex may not always be a short-term winner -- like every stock, it might lose momentum at certain points. But this biotech player already has the financial strength and portfolio of products to win over time, and that makes it a better buy right now than Moderna.

Adria Cimino has positions in Vertex Pharmaceuticals. The Motley Fool has positions in and recommends Moderna and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.