Biotech stocks are a natural area of exploration for aggressive investors with high expectations for their stocks. After all, this high-growth industry is chock-full of novel growth platforms, some of which can be challenging to understand at times. 

With this theme in mind, we asked three of our contributors which biotech stocks might be particularly appealing for enterprising investors. They recommended Kite Pharma (NASDAQ:KITE), Celgene (NASDAQ:CELG), and Acadia Pharmaceuticals (NASDAQ:ACAD). Read on to find out why.

Two researchers work side by side in a lab.

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Invest in the next wave of immuno-oncology

George Budwell (Kite Pharma): A year ago, no one knew who would end up leading the race for chimeric antigen receptor T-cell (CAR-T) therapy, or even if any of these promising therapies would prove safe enough to warrant a regulatory filing. Now this rapidly emerging field sports multiple therapies under review with the U.S. Food and Drug Administration, with Kite Pharma's Axi-Cel leading the way.

In May, the FDA granted priority review status to Axi-Cel for transplant-ineligible patients with relapsed or refractory non-Hodgkin lymphoma (NHL) and issued a Prescription Drug User Fee Act target action date of Nov. 29 for the experimental T-cell therapy at the same time, according to Kite. 

Kite has a good chance of becoming the go-to CAR-T therapy for NHL in the years to come, thanks to its all-important first-mover advantage over its likely competitors. Thus, Kite might be able to build a megablockbuster NHL franchise off this single therapy, which is a juicy proposition for a company sporting a market cap under $5.3 billion. 

Why is Kite's stock arguably undervalued relative to its long-term commercial prospects? Since it's dealing with a largely unproven technology -- and one that may even have trouble keeping up with demand because of the unique manufacturing process required to make CAR-Ts -- Kite is a high-risk biotech stock. Yet it's the exact type of high-risk, high-reward opportunity that may be of interest to enterprising investors. 

A picture-perfect biotech stock worth buying

Sean Williams (Celgene): Enterprising investors looking for smart plays in the biotech industry are probably going to have a hard time overlooking Celgene.

Profitability among biotech stocks is already a rarity, but it's what Celgene's lead drug brings to the table that's really worth marveling about. Revlimid, the leading therapy in question, which treats multiple myeloma, has been growing at a steady double-digit pace since the Food and Drug Administration approved it in 2005. This growth rate hasn't slowed much, because of longer duration of use, label expansion opportunities, strong pricing power, and better diagnostic equipment that's leading to quicker diagnoses and thus a higher number of patients with multiple myeloma diagnoses than ever. Sales of the drug are expected to hit a range of $8 billion to $8.3 billion in 2017.

But it's not just this confluence of factors that makes Celgene and Revlimid special -- it's the deal Celgene worked out with generic-drug makers back in December 2015. That's when Celgene agreed to allow Natco Pharma the ability to produce a small quantity of generic Revlimid beginning in March 2022, with a full complement of generics hitting pharmacy shelves by Jan. 31, 2026. In other words, Celgene bought itself another decade of substantial, high-margin cash flow. Mind you, there's a genuine possibility that Revlimid could become the top-selling drug worldwide by the early 2020s.

Beyond Revlimid, Celgene has several means by which to grow its top and bottom line. In July 2015, it gobbled up Receptos for $7.2 billion, bringing experimental drug ozanimod under its wing. Ozanimod has sailed through multiple sclerosis trials and could be expanded to treat ulcerative colitis, too. If approved for both indications, ozanimod has $4 billion-plus annual peak sales potential.

Celgene also has dozens of ongoing collaborations and licensing agreements. Though these collaborations could mean Celgene shells out some serious dollars to cover its milestone obligations, it also allows the company the opportunity to license a number of first-in-class oncology and anti-inflammatory meds, if successful.

You'd struggle to find a biotech stock the size of Celgene that has double-digit sales and EPS growth potential for the next five years or beyond. It's a stock that smart investors are really going to like.

No competition in sight

Brian Feroldi (Acadia Pharmaceuticals): Launching a new drug to market is always easier when you have an entire market to yourself. That's a big reason Acadia Pharmaceuticals' Nuplazid is off to a fast start. Nuplazid is the only FDA-approved treatment for Parkinson's disease psychosis (PDP), which causes patients to experience hallucinations or delusions. Roughly 40% of patients with Parkinson's disease suffer from PDP, which represents about 400,000 patients in the U.S. alone.

Given the lack of alternative treatment options, demand for Nuplazid has been high right out of the gate. Nuplazid's sales reached $17 million in 2016, which is impressive since the drug was approved for sale midyear and also had limited reimbursement access. This figure is expected to soar to $91 million in 2017 and should continue growing thereafter as awareness continues to build. 

While Nuplazid's potential in PDP is exciting, the company is also in late-stage trials studying the drug as a treatment for other diseases of the central nervous system. That list includes schizophrenia, depression, and Alzheimer's disease, all of which could prove to be huge opportunities for the business down the road. While handicapping the odds of success in these other disease states is difficult, I'd say that Acadia stands a decent shot since regulators have already approved Nuplazid to treat PDP.

Acadia promises investors fast revenue growth in the near term and the potential for additional upside if its other clinical programs work out. That's a nice one-two punch that should appeal to any biotech investor. 

Brian Feroldi owns shares of Celgene. George Budwell has no position in any stocks mentioned. Sean Williams has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Celgene. The Motley Fool has a disclosure policy.