Popularity isn't a guarantee of success in the stock market. Some well-known companies can be lousy investment choices while lesser-known ones can boast much more promising prospects. That's why it's worth looking past the hype to dig deeper and find stocks that may not be household names but are worth investing in.

With that as a backdrop, let's consider two biotech stocks that don't grab a lot of headlines but deserve serious consideration: Incyte (INCY -0.53%) and Axsome Therapeutics (AXSM -1.90%).

1. Incyte

Incyte is a drugmaker with a particular focus on the field of oncology. Its best-selling product is called Jakafi, which treats some types of bone marrow cancer, among other conditions. Jakafi generates the bulk of Incyte's revenue.

Pharmacist talking to patient.

Image source: Getty Images.

In the first quarter, the company's top line increased by 21% year over year to $733.2 million. Jakafi's sales grew by 17% year over year to $544.5 million -- or about 74% of the company's revenue.

But that still doesn't tell the whole story. Novartis markets Jakafi (as Jakavi) outside the U.S., and Incyte collects royalties from the Switzerland-based drugmaker. In the first quarter, Incyte racked up $70.9 million in royalty revenue from Novartis in connection with Jakafi, representing an 8% increase compared to the year-ago period.

Incyte's heavy reliance on this sole product is one reason why the company has lagged the market recently. Thankfully, there are reasons to be optimistic.

First, Jakafi won't lose patent protection until 2027 at the earliest. That gives enough time for the medicine to continue growing its sales and contribute meaningfully to Incyte's top line.

Second, the company has been looking to diversify its revenue base. Cancer drugs Pemazyre, Monjuvi, and Opzelura -- the topical formulation of Jakafi, which treats atopic dermatitis -- all earned regulatory approval in 2020 or later.

Patent cliffs are inevitable for drugmakers. But they aren't necessarily a death sentence. By the time Incyte loses patent protection for its best-selling medicine, it will have substantially decreased its exposure to it thanks to these new products and others that will almost certainly join its lineup in the coming years.

The company is currently running 10 pivotal clinical trials and many more early-stage studies. Even a handful of approvals, which seems more than likely to happen, will help the company prepare for life after Jakafi. That's why it is worth it to stick with this biotech stock

2. Axsome Therapeutics

Axsome Therapeutics has been dealing with regulatory headwinds for the past nine months or so. The review process for the company's leading pipeline candidate -- AXS-05, a potential therapy for major depressive disorder -- was delayed due to deficiencies that regulators found in Axsome's application. Although AXS-05 could have earned the green light as early as August of last year, the U.S. Food and Drug Administration (FDA) has yet to approve or decline the medicine. More recently, the agency declined to approve AXS-07 as a potential therapy for migraines.

Despite these issues, it is worth it to consider purchasing shares of Axsome Therapeutics. First, the FDA did not raise concerns regarding the safety or efficacy of AXS-05 and AXS-07; nor does it look like the biotech will have to run additional clinical trials for either candidate.

While regulatory obstacles are never a good thing for a drugmaker, things could be much worse for Axsome Therapeutics right now. The company still has an excellent chance of earning approval for AXS-05 and AXS-07. The potential patient population for these drugs across these two indications stands at 56 million people, according to Axsome's estimates.

Second, Axsome Therapeutics recently acquired narcolepsy treatment Sunosi from Jazz Pharmaceuticals. The transaction cost Axsome $53 million up front and future royalty payments to Jazz Pharmaceuticals. Axsome expects Sunosi to generate peak sales of more than $1 billion in its current and potential future indications (it racked up $57.9 million in revenue last year).  

Lastly, Axsome Therapeutics boasts other pipeline candidates, including potential narcolepsy treatment AXS-12 as well as AXS-14, an investigational treatment for fibromyalgia. In addition, it is looking to develop AXS-05 in treating Alzheimer's disease agitation.

With a product on the market that boasts blockbuster potential and several promising pipeline candidates, Axsome Therapeutics looks like a buy, especially considering how much its shares have struggled recently.