We recently published a list of 10 Best Diabetes Stocks To Buy According to Billionaires. In this article, we are going to take a look at where Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) stands against other best diabetes stocks to buy according to billionaires.

The Growing Market and Innovation in Continuous Glucose Monitoring (CGM) Technology

The WHO estimates that 422 million people worldwide suffer from diabetes, with the majority residing in low- or middle-income countries. On average, diabetes directly contributes to 1.5 million deaths annually. Over the past few decades, there has been a steady rise in both the prevalence and the number of cases of diabetes. Nonetheless, the International Diabetes Federation estimates that 500 million people worldwide presently have diabetes, and that figure is predicted to increase by 25% by 2030 and 51% by 2045.

One medical device used to assist manage diabetes, both type 1 and type 2, is the continuous glucose monitor (CGM). The market has grown dramatically in recent years, and it is currently a rapidly expanding category of diabetes care equipment. The demand for advanced diabetes care goods, including insulin pumps, pens, and continuous glucose monitoring (CGM) equipment, was estimated by GlobalData to be worth $21.8 billion in 2023. GlobalData projects that the market will reach $33.4 billion in revenue by 2030, growing at a compound annual growth rate (CAGR) of 6.34%.

The GlobalData marketed products database shows that there are currently 97 products in the CGM category. Most of these devices are standard CGMs, with only a few being implanted sensors. 133 products are either approved or in the development stage, according to the GlobalData pipeline products database. The research indicates that this market niche is expanding quickly and is a hub for innovative new technologies like implantable CGMs.

Today, CGM technology incorporates AI. For example, Roche introduced Accu-Chek SmartGuide, a cutting-edge CGM gadget driven by predictive AI. At the launch, Julien Boisdron, Chief Medical Officer for Roche Diabetes Care, called it “a solution more than a CGM.” He described how the system, which consists of two algorithms and a sensor, aids in data visualization and prediction.

The Rise of GLP-1 Drugs: Opportunities, Growth, and Challenges

A new era of opportunity has arrived for the management of diabetes and its associated complications. These novel strategies can effectively treat the co-occurring conditions of obesity and diabetes. A class of drugs known as glucagon-like peptide-1 (GLP-1) agonists is used to treat obesity and type 2 diabetes mellitus (T2DM). By 2030, the GLP-1 market, which is equally driven by obesity and diabetes, is expected to grow to $100 billion. About 9% of Americans, or 30 million people, may be GLP-1 users by this point.

Twelve percent of adult Americans report having taken a GLP-1 drug at some point, according to the most recent KFF Health Tracking poll. In the previous five years, 22% of patients with a diagnosis of obesity or overweight also took GLP-1, while 43% of patients with diabetes had the drug. Adults who have heard “a little” or “a lot” about these medications have gone from 70% to 82% over the past year, while those who have heard “a lot” about them have increased from 19% to 32%.

However, problems have arisen due to the increased demand for these diabetes and weight-loss medications. An “explosion in the unlicensed sale of medication online” is a potential threat, according to the National Pharmacy Association (NPA). Semaglutides, which are sold under the brand name Ozempic, help persons with type 2 diabetes manage their blood sugar. However, in other countries, like the US, where they are sold under the name Wegovy, they are also commonly used to help people lose weight. NPA chairman Nick Kaye stated:

“Pharmacists remain deeply concerned that the current medicine shortages crisis could lead to an explosion in the unlicensed sale of medication online.”

Our Methodology

For our list, we selected diabetes-related stocks from the HRTS GLP-1, Obesity, and Cardiometabolic ETF, as well as the EDOC Telemedicine and Digital Health ETF. We then ranked these stocks based on the number of billionaire investors holding stakes in them, as per Insider Monkey’s database of Q4 2024, prioritizing those with the highest billionaire ownership.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

A pharmacist delivering a specific medication to a patient in a specialty pharmacy.

Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)

Number of Billionaires: 13

Dollar Value of Billionaire Holdings: $1,102,150,742

Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), based in Boston, specializes in developing innovative treatments for serious diseases, with a focus on cystic fibrosis and type 1 diabetes (T1D) and stands fourth on our list of the 10 best diabetes stocks to buy according to billionaires. The company leverages cutting-edge technologies like CRISPR/Cas9 and stem cell therapies to address the root causes of diseases. It generates revenue through its cystic fibrosis drugs, Trikafta and Kalydeco, and is pioneering treatments for T1D, including VX-880, a stem cell-derived therapy aimed at restoring insulin production. Clinical trials have shown promising results, with patients achieving insulin independence, and the company is also developing VX-264, which eliminates the need for immunosuppressive therapies.

The corporation reported strong financial results for Q4 2024, with revenue of $2.91 billion, a 16% increase from the previous year. For the full year, 2024 revenue reached $11.02 billion, reflecting a 12% year-over-year growth. The company’s cystic fibrosis (CF) franchise, particularly the drug TRIKAFTA/KAFTRIO, contributed significantly to this growth, generating $10.24 billion in 2024. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) also ended the year with $11.2 billion in cash and investments, positioning itself for continued success.

In the diabetes treatment space, the company’s pipeline is showing promising progress. Its lead therapy, VX-880, a stem cell-derived treatment for type 1 diabetes (T1D), achieved positive Phase 1/2 trial results. Patients receiving the full dose of VX-880 showed successful islet cell engraftment and glucose-responsive insulin production. Additionally, three patients who followed up for at least 12 months met the primary endpoint of eliminating severe hypoglycemic events with HbA1c levels below 7%. The market for T1D is substantial, with VX-880 targeting 60,000 patients, including brittle diabetics and kidney transplant recipients. The corporation is also developing an encapsulated cell program to expand its reach to the broader T1D population.

Looking ahead, Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is poised for continued growth, supported by recent FDA approvals, including ALYFTREK for CF patients and JOURNAVX for acute pain. These products, along with its robust pipeline, which includes four pivotal development programs, are expected to contribute to a projected 2025 revenue range of $11.75 to $12 billion. The company is also preparing for potential near-term launches of new treatments in CF and acute pain management.

Overall, VRTX ranks 4th on our list of best diabetes stocks to buy according to billionaires. While we acknowledge the potential of healthcare companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than VRTX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires

Disclosure: None. This article is originally published at Insider Monkey.