GW Pharmaceuticals (NASDAQ:GWPH) and Cara Therapeutics (NASDAQ:CARA) are both developing drugs that are a bit unusual, and they're enjoying more success than most would have imagined possible a few short years ago.

There are reasons to suspect both of these drugmaker stocks can outperform over the long run, but which is poised to fly higher? Let's look at the case for each one to see which is the better stock to buy now.

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The case for GW Pharmaceuticals

There are around 2.2 million Americans living with some kind of epilepsy, and around 35,000 of them have Dravet syndrome or Lennox-Gastaut syndrome. Around a year ago the FDA approved a purified cannabidiol (CBD) tincture called Epidiolex to specifically treat these early onset forms of severe epilepsy.

Adult epileptics have been preventing seizures with cannabis for decades, but Epidiolex is the first drug derived from the plant to earn approval from the U.S. Food and Drug Administration (FDA). That approval's a big deal, but at recent prices, GW Pharmaceuticals already boasts an enormous $5.3 billion market cap.

Drugmaker stocks generally trade at mid-digit multiples of annual revenue, which means investors are expecting a great deal more growth. If Epidiolex sales don't steadily grow from an annualized run rate of $134 million at the moment to more than $1 billion in a few years, investors could lose money.

At an annualized price of roughly $30,000 per year per patient, Epidiolex isn't cheap, but it is the only CBD tincture that patients with Dravet and Lennox-Gastaut can get someone else to pay for. Anyone who doesn't have seizures caused by these rare disorders, though, will have to pay out of their own pockets. With dozens of places online selling cheap, purified CBD made in facilities that the FDA isn't monitoring, that won't happen very often.

Soon GW Pharmaceuticals will submit an application to reduce seizure frequency among an estimated 60,000 Americans affected by tuberous sclerosis complex. GW's also developing Epidiolex to treat another rare disorder that leads to frequent seizures, Rett syndrome. We'll know if the company can expand sales to an estimated 11,000 Rett patients in the U.S. when a recently started phase 3 trial reads out in 2021.

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The case for Cara Therapeutics

Unlike GW Pharmaceuticals, Cara Therapeutics is still a clinical-stage biotech without any products yet to sell. That could change in 2020, thanks to a recent clinical trial success with its lead candidate, Korsuva. Cara has tried developing the same active ingredient as an infusion and an oral treatment, but it looks like an injection will be first to market.

Korsuva is aimed at the growing population of people with chronic kidney disease-associated pruritus (CKD-aP) who are on dialysis. There are around half a million people with bad kidneys who suffer from persistent itching that makes it hard to enjoy just about anything, including a good night's sleep.

During the Kalm-1 study, 51% of patients treated with Korsuva reported itch intensity scores three points lower compared to just 28% of the placebo group. Although it is an opioid, Korsuva is only active in the peripheral nervous system where itch signals originate. That's why the drug is incapable of causing the euphoric sensations that make traditional opioids so addictive.

Independent new drug launches tend to disappoint, but Cara has a better-than-average chance of success with Korsuva. Last year, Cara Therapeutics signed up Fresenius Medical Care (NYSE:FMS) as an international commercialization partner. At the end of 2018, Fresenius ran 3,928 dialysis clinics around the world and 31% of dialysis clinics in the U.S. With help from Fresenius, Cara could record more than $500 million annually several years after earning approvals for patients who receive hemodialysis and peritoneal dialysis.

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The better buy

Cara's market cap sits at a sprightly $888 million, or less than half of Korsuva's peak annual sales potential. That means the stock can still provide long-term gains if the company misses expectations by a wide margin.

In stark contrast, GW Pharmaceuticals must exceed lofty expectations with Epidiolex or investors could suffer some heavy losses. There's a slight chance of a long delay for Korsuva, but Cara Therapeutics still looks like a much safer bet with more potential upside -- and the better biotech stock to buy right now.

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.