You might think that if a pharmaceutical company has a high-selling drug, it is a surefire stock and a surefire winner. In some cases, that may be true. But in other cases, it can also be a risk, as investors become increasingly concerned about what a company’s growth prospects will be once the relevant patent expires, especially if the drug accounts for a significant portion of the company’s revenue.

The three top-selling drugs in 2023 came from Merck (MRC 0.32%), AbbVie (ABBV 0.26%)And Novo Nordisk (NVO -1.58%)Here’s a closer look at these blockbusters: how much revenue they brought in, what their growth prospects look like, and whether these stocks are a good investment today.

Merck: Keytruda ($25 billion)

With sales of a whopping $25 billion in 2023, Keytruda was by far Merck’s top-selling drug last year, accounting for just under 42% of the company’s revenue. The cancer drug has proven highly successful in extending patients’ lives and has been approved by the Food and Drug Administration for many different indications. Keytruda’s sales rose 21% last year when excluding the impact of foreign exchange trading. Analysts believe sales could rise even further, surpassing the $33 billion mark in 2027 before biosimilars hit the market.

The big question for Merck is how it can cope with the looming patent expiration and compensate for the inevitable drop in sales. To soften the blow, the company has been developing new drugs and buying up companies. One particularly attractive product is Winrevair, a drug for pulmonary arterial hypertension; at its peak, it could generate sales of $5 billion.

Merck still has several years to bring new products to market, but there’s no doubt that Keytruda’s patent cliff could become a problem. The stock currently trades at 14 times estimated earnings, which is a bit discounted. If you can handle a certain amount of risk and uncertainty, it may be worth adding to your portfolio.

AbbVie: Humira ($14.4 billion)

Humira is AbbVie’s best-selling arthritis drug. At $14.4 billion, it generated a lot of revenue in 2023—27% of the company’s total revenue. Sales of the drug have already started to decline due to increasing competition, falling more than 32% last year.

However, the company has two fast-growing immunology drugs, Skyrizi and Rinvoq, which management expects to have higher combined peak sales than Humira, which already totaled $11.7 billion last year.

This makes it a little less risky as the company has been working on its growth strategy. It expects a “return to robust growth” by next year and forecasts it will achieve a high-single-digit annual growth rate after that. AbbVie stock trades at 18 times forward earnings estimates, making it a potentially undervalued stock for investors to buy and hold now.

Novo Nordisk: Ozempic (13.9 billion dollars)

The only drug on this list that is not going off patent anytime soon is Ozempic. In most markets, including the US, it will not lose its patent protection until the next decade. This is good news for Novo Nordisk: not only did the drug achieve 66% sales growth (excluding foreign exchange) last year, but it also accounted for more than 41% of the company’s total sales.

The bigger risk for investors is that new weight-loss treatments come to market that could cut into Ozempic’s revenue growth. Although it’s technically approved for diabetes, patients take Ozempic outside of its approved weight-loss indications because it can help people lose more than 15% of their body weight on average. I wouldn’t expect it to remain a top drug just because Novo Nordisk now has an approved weight-loss drug, Wegovy, that could overtake Ozempic in the not-too-distant future.

Whatever the case, Novo Nordisk is one of the best healthcare stocks to invest in. It offers a great way to take advantage of potential growth opportunities in both weight loss and diabetes care. That’s why the stock is the only one on this list that isn’t cheap – it trades at a price-to-earnings ratio of 38. But despite the high price, it can still be a good deal given the company’s fantastic growth prospects. Novo Nordisk expects revenue growth of 22-28% this year.