2019 was a good year for the stock market; the S&P 500 provided a return of almost 30% during the year. And some industries performed even better than that. Consider the biotech industry, measured by the SPDR S&P Biotech ETF, which was up by about 32.5% in 2019. Could biotech stocks keep this pace up? It's hard to tell, but if you are interested in investing in biotech stocks, here are two companies you should keep an eye on: Acadia Pharmaceuticals (NASDAQ:ACAD) and CRISPR Therapeutics (NASDAQ:CRSP)

A one-trick pony? 

Acadia only has one drug on the market, a medicine called Nuplazid, which treats hallucinations and delusions associated with Parkinson's disease psychosis (PDP). Sales of Nuplazid are growing fast. During the third quarter, Nuplazid recorded $94.6 million in sales, a 62% year-over-year increase. Of course, reliance on a single product can be a major problem for a biotech company. That said, the future of Nuplazid looks bright; here are two reasons why. 

Scientist with lab coat touching DNA strand.

Image source: Getty Images.

First, Parkison's disease is the second most common neurodegenerative disorder after Alzheimer's. About one million people in the U.S. suffer from Parkison's disease, with that number exceeding 10 million worldwide. Roughly 50% of people with Parkison's disease develop some form of PDP. As Nuplazid is the only drug approved by the U.S. Food and Drug Administration (FDA) for the treatment of PDP, it has an exciting market opportunity in the U.S., and a potentially even bigger one abroad.

Second, Acadia is looking to add a new indication to Nuplazid. Last year, the company announced positive results for a phase 3 trial investigating Nuplazid as a treatment for dementia-related psychosis. The study was stopped early after Nuplazid hit its primary endpoint, news that caused Acadia's shares to soar.

The company said it planned on approaching the FDA regarding a supplemental New Drug Application (NDA) sometime this year. About 2.4 million people in the U.S. have dementia-related psychosis, and there are no FDA-approved treatments for this condition. If Nuplazid is approved for dementia-related psychosis, sales of the drug could skyrocket along with Acadia's stock. In other words, Acadia's 164.6% gain last year may only be the beginning. 

Focusing on gene-editing

Shares of CRISPR Therapeutics grew by 113.2% last year despite the company not having a single drug on the market. What is behind this performance? CRISPR Therapeutics focuses on developing cures for diseases using a method known as gene-editing. This method seeks to remove the defective genes that cause certain conditions and replace them with their healthier versions. It's a difficult task, to be sure, but CRISPR Therapeutics seems to be making significant headway, particularly with its most crucial pipeline candidate, CTX001.

CTX001, which CRISPR Therapeutics is developing in collaboration with Vertex Pharmaceuticals (NASDAQ:VRTX), is currently targeting two conditions. First, there's sickle cell disease (SCD), an illness that affects a person's red blood cells and can lead to organ damage and a shortened lifespan. SCD affects 100,000 people in the U.S. and millions more worldwide. While there are treatment options for the condition, it cannot be cured -- at least not yet. 

Second, CRISPR Therapeutics is going after transfusion-dependent beta-thalassemia (TDT), a blood disease that can lead to severe anemia. TDT affects about one person in 100,000. Patients with this rare condition need constant blood transfusions. Biotech bluebird bio (NASDAQ:BLUE) has one gene-editing drug, Zynteglo, which is approved in Europe for the treatment of TDT. But bluebird has yet to receive the green light to market Zynteglo in the U.S. Also, not all patients with TDT are eligible to take Zynteglo. 

In November, CRISPR Therapeutics announced positive results from clinical studies investigating the efficacy of CTX001 on two patients, one with SCD and the other with TDT. The patient with SCD experienced an average of seven vaso-occlusive crises (VOC, a common complication of SCD that causes acute pain) per year before participating in the clinical trial, but four months after receiving treatment, the patient reported no episodes of VOC (the expectation was that the patient would experience two such episodes if not for the treatment).

The patient with TDT was transfusion-independent nine months after receiving treatment, whereas this patient required an average of 16.5 blood transfusions per year before receiving the treatment. Of course, given that CRISPR Therapeutics has yet to even send CTX001 to the FDA's desk for review, it will likely be a while before the company can profit from this product -- if it gets approved at all. Still, the potential market opportunity for CRISPR Therapeutics' CTX001 is exciting, and it will be interesting to keep an eye on how things evolve.

CRISPR Therapeutics has other products in its pipeline, including potential cancer treatments CTX110 and CTX120. Thanks to its collaboration with Vertex Pharma -- from which it received an upfront payment of $175 million last year in a licensing agreement to develop gene-editing therapies --  CRISPR Therapeutics recorded a revenue of $211.9 million during the third quarter and ended the quarter with a cash balance of $629.7 million. 

With several interesting targets on its radar and help from Vertex Pharma, things could go according to plan for CRISPR Therapeutics. If that happens, the company could continue providing market-beating returns.