With the S&P 500 near a record high, growth stocks may not seem like a particularly attractive option right now. The fear of buying at the top, after all, is a common concern among most investors. 

A more levelheaded analysis, however, shows that there are still plenty of companies set to grow their earnings at noteworthy levels for years to come. For example, the mid-cap biotechs Heron Therapeutics (NASDAQ:HRTX) and Intercept Pharmaceuticals (NASDAQ:ICPT) are both on the verge of entering periods of hypergrowth that could make early shareholders a lot of money over time. Read on to find out more about these two top biotech growth plays.

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A disruptive new pain medicine

Earlier this year, Heron reported overwhelmingly positive results for a pair of late-stage trials assessing acute-pain candidate HTX-011 in patients undergoing bunion surgery and hernia repair. A few months later, the biotech followed this late-stage success by rolling out positive mid-stage trial results for the drug in knee surgery and breast augmentation.

Beyond providing long-acting pain relief, HTX-011 has consistently been able to significantly reduce the need for opioids following these various procedures, a feat several other experimental pain medications have failed to achieve. The Food and Drug Administration (FDA) thus saw fit to give HTX-011 a Breakthrough Therapy designation in the wake of these stellar mid- and late-stage results. This coveted regulatory designation permits a speedier review time and is generally only granted when a drug offers a substantial improvement over the standard of care for serious medical conditions.  

The big deal here is that there is a well-documented need for alternatives to opioids in the acute-pain setting because of the potential for addiction, as well as fatal overdoses. The current suite of opioids used as the standard of care for acute pain also produces a host of undesirable side effects, such as constipation, nausea, and vomiting. HTX-011 thus has a real shot at garnering a premium pricing point without much push-back from third-party payers, which should translate into blockbuster-level sales for the drug down the line. 

With HTX-011's regulatory application on track to be filed later this year, Heron is perhaps less than a year away from having a bona fide franchise-level product in its portfolio. Heron currently has two chemotherapy-induced nausea agents on the market -- Sustol and Cinvanti -- but neither product is expected to generate game-changing sales.

An approval for a high-value product candidate like HTX-011 would therefore provide a much-needed boost to Heron's growth engine and open up numerous business development opportunities in the next decade. Heron's stock, in turn, could be gearing up for a sustained period of solid growth from here.  

The next big thing in biotech

Intercept Pharmaceuticals is attempting to become the first company with an FDA-approved drug for the non-viral liver disease known as nonalcoholic steatohepatitis, or NASH. Because there is no current treatment for NASH and upwards of 5% of Americans are already afflicted with this serious ailment, this under-served market is widely expected to be the next big boon for biotech in general.

As things stand now, there are roughly 20 compounds in development for NASH, and the market is forecast to eventually generate annual drug sales exceeding an eye-popping $35 billion. Intercept's Ocaliva -- a drug currently approved in the U.S. and Europe as a treatment for primary biliary cholangitis (PBC) -- is the most advanced NASH candidate in development right now. The drug's phase 3 trial, for instance, is on track to produce top-line results as early as the first half of 2019.

The juicy part of this story is that Wall Street thinks this first-mover advantage could drive peak sales of a stunning $8.6 billion -- that is, depending on how it stacks up against other experimental NASH candidates in terms of both efficacy and safety. To put this monstrous peak sales figure into perspective, Intercept's current market cap is only $3.46 billion. So it's not a stretch to say that Intercept's shares would almost certainly rip higher if Ocaliva's ongoing NASH trial is a success. The biotech's shares, after all, are arguably already undervalued based on Ocaliva's substantial commercial prospects in PBC. 

Time to buy?

Heron and Intercept are both trading well below the peak sales estimates of their top value drivers, and that's because both of these promising drugs still have some key hurdles to overcome in the near term. For instance, U.S. regulators still have to review and approve Heron's HTX-011. And Intercept's Ocaliva needs to strike gold in its late-stage NASH trial. Still, these risk factors aren't exactly enormous obstacles for either company. 

Heron's experimental pain medication undoubtedly has the FDA's full attention because of the dire need for alternatives to opioids in the acute-pain setting, combined with the drug's best-in-class clinical profile for this indication. And Intercept's Ocaliva has shown strong signs of efficacy in NASH in prior trials. Regardless, the market hasn't baked in Ocaliva's enormous opportunity in NASH -- otherwise, Intercept's shares would be trading well north of their current price. 

Bottom line: Both of these growth stocks offer compelling risk-to-reward ratios. Therefore, aggressive investors comfortable with moderate levels of risk may want to start building a position in these two promising biotech companies soon.  

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.