There's a bifurcation in healthcare: the companies that are fighting COVID-19, and the companies that are not. Many of the stocks of the former have zoomed higher. But others have seen delays in their business, and COVID-19 has hurt these stocks. Some of these companies are real bargains now. 

Three contributors like pulmonary specialist Pulmonx (LUNG 5.56%), Vertex Pharmaceuticals (VRTX 0.88%), and Axsome Therapeutics (AXSM 1.41%). Read on to see why these three stocks might crush the market over the next few years.

Scientific researchers take notes in the lab as they analyze chemicals in test tubes.

Image source: Getty Images.

This lung specialist is poised to run higher

Patrick Bafuma (Pulmonx): It is difficult to imagine a clinical specialty that has been battered more by COVID-19 than pulmonary and critical care providers. These are lung specialists who cover the intensive care unit and also see patients with severe lung disease in the office. And, since the coronavirus can trash a patient's respiratory system, let's just say pulmonary/critical care specialists have been busy for the last year and a half. So when COVID-19 is over, these experts may have more time to do elective procedures. This is why I choose interventional pulmonary company Pulmonx as my pick to skyrocket when the COVID-19 pandemic is over. 

Before COVID-19, emphysema was the major lung problem of our time. In fact, for severe disease, medical treatment had limited efficacy, and options like a lung transplant or other surgical interventions had at least a 5% risk of death. But with the Pulmonx Zephyr treatment, that all might be changing. This $1.5 billion lung specialist has an implantable and removable valve (dubbed Zephyr) that can be inserted into a portion of severely diseased lungs to improve lung function in less than an hour. With Zephyr valves, patients with severe emphysema experience improved quality of life, improved exercise capacity, and a 15% to 28% improvement in lung function. Not only that, but patients experienced a 39% decrease in chronic obstructive pulmonary disease exacerbations requiring hospitalization and a 53% reduction in pneumonia hospitalizations. Even better, at five years following treatment, patients are about 45% more likely to survive and about 166% more likely to survive at 10 years.

With an 84% to 90% success rate, Pulmonx seems to have a winner on its hands. Roughly 90% of patients who are undergoing this type of procedure have done it with Zephyr valves. Once COVID-19 gives interventional pulmonologists a chance to get back to procedures, Pulmonx is poised to take a bigger bite of this $12 billion opportunity for severe emphysema.

VRTX Chart

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Vertex: Buy the dip

George Budwell (Vertex Pharmaceuticals): Rare disease giant Vertex Pharmaceuticals has been one of the few laggards in its red-hot market. The biotech's stock is presently down by a whopping 16.2% so far this year due to two separate clinical failures for drugs intended to treat the rare genetic disorder alpha-1 antitrypsin deficiency (AATD). While these AATD drug candidates weren't going to make or break Vertex from a financial standpoint, investors took these dual clinical setbacks as a sign that the biotech may not be able to readily expand beyond its core cystic fibrosis market. Vertex's cystic fibrosis franchise presently treats nearly 50% of patients in the U.S., Europe, Australia, and Canada, and the company expects this number to swell to a mind-boggling 90% before the end of the decade. 

Why should investors have this large-cap biotech stock on their radars right now? Within the next three years, Vertex has a better-than-average chance of opening up an entirely new treatment modality through its expansion into gene editing. The biotech already has a promising collaboration underway with CRISPR Therapeutics, and it recently inked another deal with privately held Arbor Biotechnologies to explore the development of next-generation gene-editing technologies for a host of disorders. These two gene-editing partnerships could set the biotech on the path toward high double-digit revenue growth for the better part of the next two decades.

What's the downside risk? Vertex's shares are currently trading at roughly six times 2022 projected revenue. That's not a particularly rich valuation within the realm of biotech, and it certainly doesn't reflect the enormous upside potential stemming from the company's foray into gene editing. In short, Vertex's stock is arguably grossly undervalued at this point -- meaning that another clinical flop probably won't have a significant impact on its share price.

Bottom line: Vertex's stock should rebound nicely once COVID-19 stops being the main focal point for healthcare stocks at large. 

Delays have made this high-flying stock very cheap  

Taylor Carmichael (Axsome Therapeutics): Axsome Therapeutics is a fascinating company with drugs for the central nervous system. The company has drugs for depression, migraine, smoking cessation, agitation from Alzheimer's disease, and narcolepsy.

What's particularly exciting about Axsome is how close the company is to having drugs on the market. Axsome is a small biotech with a $1 billion market cap. And yet the company is in a very strong position right now, with two major drugs that have finished clinical trials. Axsome has submitted not one but two New Drug Applications this year.  

The FDA has missed its self-imposed deadline for its review of the company's lead molecule, AXS-05, a "breakthrough therapy" for major depressive disorder, citing deficiencies in the NDA. It did not identify what they are and the agency has asked for no further information.

Meanwhile, in the second quarter Axsome filed its NDA for another drug, AXS-07, for migraine. The company hopes that the FDA will accept its application this quarter, but so far no date for review has been set.

The market hates uncertainty, and so Axsome's stock has been hammered as jittery investors have bailed on the stock while the FDA has stalled its review. The stock started the year over $80 a share. Now it's trading hands at $26.

Considering that the FDA has prioritized COVID-19 response all year, I wouldn't assume bad news based on a delay in the non-COVID-19 review process. The phase 3 data for both drugs is quite strong. Bullish investors should definitely hang tight, and might consider adding shares at these cheap prices.