Growth stocks can be a thing of beauty. These types of equities can linger in your portfolio for years without doing much. Then one day, they can double or even triple in value within a matter of hours. The trick, if you will, is to suss out growth stocks that won't rot on the vine, so to speak.
Which super-charged growth stocks should investors buy right now? I'm a big fan of both BioCryst Pharmaceuticals (BCRX 3.39%) and ChemoCentryx (CCXI). While both of these biotech stocks have more than doubled in value in the past three years, I believe each of these healthcare equities still has a lot of room to run in 2022 and beyond. Here's why.
BioCryst: A clear path for growth
BioCryst's core growth driver is its oral hereditary angioedema (HAE) drug known as Orladeyo. HAE is a rare disorder characterized by swelling of the hands, feet, limbs, face, intestinal tract, and/or respiratory pathways. Approved in late 2020, the drug has gotten off to a blazing start from a sales perspective.
While some analysts thought the drug would basically be a niche product for individuals who are afraid of injectables, Orladeyo has started to gobble up market share in a hurry. During its first two full quarters on the market, for instance, the drug has cruised past analysts' quarterly sales estimates both times.
Wall Street's current consensus estimate has Orladeyo generating around $300 million in sales by 2023. But the way this drug is ripping market share away from Takeda's blockbuster injectable treatment Takhzyro, this estimate may be way off the mark. Orladeyo, in fact, might eclipse $300 million in sales by next year. That's why some analysts think this stock could jump by another 44% within the next 12 months.
What's the long-term outlook for this biotech stock? While BioCryst has other interesting clinical assets in its pipeline, Orladeyo's commercial trajectory is undoubtedly going to be the central focus for investors for a while. And that's good news. This drug has the potential to become a blockbuster product by the middle of the decade, after all. If you're a growth-oriented investor, this small-cap biotech is definitely worth the time for a deep dive.
ChemoCentryx: The next phase has begun
Shares of the small-molecule drugmaker ChemoCentryx nearly doubled in value in a single trading session earlier this month because the U.S. Food and Drug Administration (FDA) approved the biotech's orally administered treatment Tavneos for a rare disease known as ANCA-associated vasculitis. This is an umbrella term for a group of autoimmune diseases that affect small blood vessels in the body. The disease, if left untreated, can result in organ failure.
What's the big deal? Although Tavneos is indicated for a fairly rare condition, its reported list price of between $150,000 to $200,000 per patient per year implies that it could rake in close to $2 billion in sales at its peak. That's a healthy revenue stream for a company with a market cap of approximately $2.5 billion at the time of writing.
What's the near-term upside potential? Launching new drugs is always a challenge. But ChemoCentryx has a built-in advantage with this particular indication -- namely, it won't require a massive sales force to convince doctors to prescribe it in combination with standard therapy. After all, these patients are reportedly already waiting for new treatment options -- a fact that bodes well for Tavneos' initial commercial launch.
Long story short, Wall Street's current 12-month price target implies that this stock could appreciate by as much as 96% as a result of the company's first official drug launch. While that type of growth may sound outlandish, this forward-looking price target probably isn't far off the mark.
Rare-disease drugs like Tavneos tend to have rapid adoption rates, little to no pushback from payers, and long commercial shelf lives. This mid-cap biotech stock, therefore, definitely has a stellar shot at continuing its recent surge higher.