As the saying goes, "If there's no risk, there's no reward." No investment is without risk, but stocks that have life-changing potential tend to come with higher risks than your average investment. Of course, if you're right, the rewards can be enormous. 

With this in mind, we asked three of our Foolish investors to name a stock that they felt had life-changing potential. Rising to the top of the pack were drug developer Lexicon Pharmaceuticals (LXRX 0.62%), e-commerce car-buying platform Carvana (CVNA -0.69%), and online travel website TripAdvisor (TRIP 0.68%)

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A first-in-class diabetes drug could soon hit pharmacy shelves

Sean Williams (Lexicon Pharmaceuticals): If you want a potentially life-changing company and investment, take a gander at biopharmaceutical company Lexicon Pharmaceuticals.

Like all drug developers, Lexicon is aiming to make waves with its medicines. While it does have one approved product already on the market, Xermelo, as a treatment for adults with carcinoid syndrome diarrhea that somatostatin analog therapy alone hasn't adequately controlled, it's the potential for sotagliflozin that should be front and center.

Sotagliflozin is a first-in-class diabetes medication geared at inhibiting both SGLT-1 and SGLT-2. The latter, SGLT-2, is a common target within the kidneys for about a half-dozen approved diabetes drugs. SGLT-2 therapies are focused at type 2 diabetics, and they work by blocking glucose absorption in the kidneys, thus allowing the patient to excrete excess glucose through their urine. Lexicon's sotagliflozin would take that same SGLT-2 inhibition and step it up one notch with SGLT-1 inhibition in the intestines. The idea being this added block could better help control glycemic balance, while still offering the positive side effects of lower systolic blood pressure and weight loss often observed in SGLT-2-inhibiting drug trials.

How has sotagliflozin fared in clinical studies? Thus far it's flown through phase 3 trials for type 1 diabetics -- note, this is another key difference, as Lexicon's therapy is geared at type 1 and 2 diabetes. In June, Lexicon reported positive top-line results for sotagliflozin relative to a placebo at week 24 in the inTandem3 trial, with no patients experiencing severe hypoglycemia or diabetic ketoacidosis after randomization. 

A nurse using a glycometer on a young diabetes patient.

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But the crown jewel for Lexicon is type 2 diabetes, since it represents up to 95% of all diabetes diagnoses. In this respect, the company has some help. Back in 2015, Lexicon and Sanofi (SNY -0.94%) inked a licensing deal for sotagliflozin that landed Lexicon $300 million upfront, as well as the opportunity to earn $1.4 billion in additional development, regulatory, and sales milestones. Lexicon also enjoys a double-digit royalty on net sales, assuming approval. Sanofi is taking charge of late-stage studies for sotagliflozin in type 2 diabetes.

What we have with sotagliflozin is a drug that could make a major impact on the lives of diabetics, and could generate north of $2 billion in annual sales, if the cards fall its way. That's a life-changer and a gamechanger!

A used car revolution?

Daniel Miller (Carvana): There is plenty of doom and gloom to go around the automotive industry as new light-vehicle sales plateau in the U.S. market, but one bright spot recently has been the initial public offering of Carvana, which revolves around the used car market. The company's mission of trying to change the way people buy used cars is the core reason it could be a life changer over the long-term -- but it's certainly no small task.

Essentially, Carvana is offering consumers an alternative to the typical dealership buying process. By removing the dealership infrastructure network and using its fully online transactional website it can offer customers vehicle delivery as soon as the next day in 32 of its 48 total states of operation. According to Carvana, customers can spend as little as 10 minutes on the website, rather than the historical half-day at a dealership, and purchase a vehicle; in 2016 customers saved an average of $1,430 off of Kelley Blue Book's suggested retail value.

Hundred dollar bills shaped to look like a car.

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One advantage Carvana has going for it is that it started out with an online focus which isn't simple or cheap to develop. When you combine that with the fact that the top 100 used auto retailers account for 7% of the U.S. market share, per Carvana sourcing Automotive News Top 100 Dealership Groups data, few dealerships or even dealership groups have the capital to create a similar approach as Carvana has already done.

The company's vending machine concept are few in number, but are incredibly intriguing and eye-popping, and if the company can pull the lever on increasing its brand recognition and sales volume in existing markets, expanding efficiently, and change the way consumers purchase used cars this could easily be a life changer -- admittedly, that's no easy task!

A vacation you won't forget

Demitri Kalogeropoulos (Tripadvisor): Life-changing investments tend to pair unusually high risk with a massive long-term market opportunity, and that's the trade-off I see with Tripadvisor today. To be sure, the vacation-booking travel site hasn't been a good holding for investors lately. Sales declined in 2016 as net income plunged by 39%. Its early 2017 results weren't much better, as the company missed consensus estimates on both the top and bottom lines.

A family portrait while vacationing on the beach.

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Management has been telling investors for over a year now that its switch to an instant booking sales model, while brutal to short-term results, will ultimately pay off by making the service far more attractive to users. The latest engagement numbers seem to add weight to that claim. Site traffic has improved at a 20% compound annual growth rate over the past three years and Tripadvisor passed 500 million user reviews and opinions. And the hotel booking business just returned to modest sales growth after six straight quarters of declines.

It's possible this momentum won't stick around over the next few quarters, which would leave the company scrambling to find other ways to monetize its large pool of users. Yet executives have plenty of motivation to perfect their sales approach, given the bright outlook for the industry. Tripadvisor is home to the world's biggest traveling community, but its $1.5 billion of annual revenue translates to just a tiny fraction of the nearly $600 billion spent booking vacations online each year.