3 pharma stocks that could benefit from global trends

When it comes to finding the good pharma shares to buy, I try to focus on companies that are developing drugs that can help large numbers of people. After all, high profits are the ultimate key catalyst for stocks, and it is much easier for companies to generate gigantic profits if there is huge demand for the products they develop.

The following three drug stocks certainly fit this criteria. One of them has a very promising treatment for cancer, which is one of the leading causes of death in the United States and around the world. The second pharma stock buy I’m featuring today has created a treatment for diabetes that has enormous potential. Diabetes is also a leading killer in America and around the world, and its prevalence is increasing every year in America and around the world.

The last company on my list has developed what appears to be an excellent non-addictive pain treatment. Of course, pain is a widespread condition that all humans experience and addictive pain treatments have killed millions over the past 20 years.

Here are three excellent pharmaceutical stocks to buy for long-term investors.

Pharmaceutical stocks: GSK (GSK)

I was first excited by GSK (NYSE:GSK) cancer treatment, Jemperli, after a study last year showed that the drug completely cured 100% of the 12 patients who received treatment with it. I don’t remember seeing a cancer drug achieve a 100% cure rate in a trial.

In recent months, GSK has taken steps that bring Jemperli closer to becoming a blockbuster. Last month, for example, the FDA approved Jemprli as treatment for certain types of endometrial cancer. Additionally, in February, an FDA panel recommended that GSK be allowed to use “data from two proposed single-arm trials” on Jemperli to prove the drug is an effective treatment for certain types of rectal cancer.

By only presenting data on patients with rectal cancer who receive Jemperli, without comparing their progress to that of patients who receive a placebo, GSK will be able to obtain FDA approval for the use medicine as a treatment for the disease more quickly and at a lower cost. It’s also worth noting that the agency has given Jemprli “fast track designation” in the rectal cancer indication, which shows the FDA is very optimistic about the drug and facilitates much faster approval of the treatment.

In the long term, I expect Jemperli to be approved as a treatment for a wide range of cancers in Europe, India, Japan and many other countries.

Therapeutic VTv (VTVT)

Source: Shutterstock

Like GSK, vTv (NASDAQ:TVVT) has a drug that looks set to become a blockbuster, and the company continues to make strides to realize the treatment’s enormous potential.

Specifically, vTv earlier this month announced that it plans “to begin initiation activities” for two studies of its diabetes drug, TTP399, later this year. Additionally, vTv noted that the FDA had approved the company’s plan for a trial of TTP399 in pediatric patients.

The FDA has granted TTP399 “breakthrough” status, indicating that the agency is extremely enthusiastic and optimistic about the drug. The designation will also allow vTv to bring the drug to market more quickly.

In a Phase 2 trial, TTP399 significantly lowered the blood sugar levels of patients with type 1 diabetes and reduced the number of their “hypoglycaemic episodes by 40%”. The FDA has agreed to allow vTv to use “number of hypoglycemic events” as the primary endpoint for the company’s two upcoming studies. Given the tremendous success of TTP399 in reducing such events in the previous phase 2 trial, I expect the drug to easily achieve the primary endpoint in the two upcoming trials.

Although vTv is primarily developing TTP3999 as a treatment for type 1 diabetes, in a previous trial the drug “achieved statistically significant reductions” in blood sugar levels in type 2 diabetes patients.

Therefore, I expect vTv to eventually develop the drug as a treatment for type 2 diabetes.

Vertex Pharmaceuticals (VRTX)

Source: Pavel Kapysh / Shutterstock.com

Last October, Vertex Pharmaceuticals (NASDAQ:VRTX) launched a Phase 3 painkiller test drug, VX-548. In July, the company announced plans to launch a second phase 3 trial in the last quarter.

The two studies will assess “the efficacy and safety of VX-548 for moderate to severe acute pain after bunion surgery or abdominoplasty.”

In two phase 2 trials, the drug triggered “rapid, statistically significant, and clinically meaningful improvement” in pain levels, Vertex reported in March.

The drug was generally “well tolerated”. And above all, according to Vertex, the treatment has no “addictive potential”. Additionally, Vertex noted that “the FDA has granted Breakthrough Therapy Designation to VX-548 for the treatment of moderate to severe acute pain.”

As with vTv, the FDA’s decision to grant VX-548 Breakthrough designation shows that the agency is very optimistic about the drug’s potential, and the designation should allow Vertex to bring the drug to market relatively quickly and inexpensively.

Given the enormous potential of the VX-548, the 20.8 forward price-earnings the stock VRTX ratio is quite attractive.

As of the date of publication, Larry Ramer owned shares of VTVT. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.