Could a lousy, no-good, rotten year for biotech have a silver lining? It's hard to imagine the market's sentiment about innovative drugmakers getting worse than it already is. The Nasdaq Biotechnology Index has fallen by 20% so far in 2022, and it's more than 30% below the all-time high it set last summer.

Some of the pain biotech investors have felt this year stems from a Food and Drug Administration (FDA) that has been less permissive than usual regarding new drug applications. Since 2017, the regulator has averaged more than 51 new drug approvals per year. We're already halfway through 2022 and the agency has given the green light to just 16 novel new drugs.

This could end up being the FDA's quietest year in memory -- or there could be a slew of new drug approvals around the corner. One thing is for sure: Over the next three months, the agency will make decisions about potential blockbuster treatments from two companies that badly need some wins.

1. Deucravacitinib from Bristol Myers Squibb

On or before Sept. 10, the FDA is expected to issue an approval decision for deucravacitinib, an experimental psoriasis treatment from Bristol Myers Squibb (BMY -1.71%). If approved, it will be the third potential blockbuster to emerge from the company's pipeline this year, with peak annual sales expectations above $4 billion.

Bristol Myers Squibb needs a win here because its most important revenue streams are about to dry up. Revlimid, a cancer treatment that racked up $12.8 billion in sales last year, has already started losing ground to the generic version that Teva Pharmaceuticals launched in March.  

Deucravacitinib could be a big deal for Bristol Myers Squibb and its peers because it selectively inhibits a Janus kinase (JAK) called TYK2. The FDA has been especially strict regarding JAK inhibitors because they're associated with some rare but serious side effects. As a more selective JAK inhibitor, deucravacitinib could receive less restrictive labeling with fewer warnings than the drugs it's meant to compete with. 

2. Beti-cel and eli-cel from Bluebird Bio

Shares of Bluebird Bio (BLUE -5.17%) have been under a lot of pressure because the company spun off its revenue-generating cancer programs into a separate business called 2seventy Bio (TSVT -8.70%) last year. 2seventy Bio is already receiving modest royalties from its partner, Bristol Myers Squibb, on sales of Abecma, a recently approved cancer therapy. 

2seventy's Bio's mama bird hasn't had a chance to flap its wings yet, but this could change in August or September. In August, the FDA is expected to issue an approval decision regarding beti-cel for the treatment of beta-thalassemia. And in September, the agency is set to announce its decision regarding eli-cel for the treatment of a rare disorder called cerebral adrenoleukodystrophy (CALD).

Beti-cel and eli-cel are gene therapies meant to provide a lifetime effect with a single administration. Sadly, this also means that any potential risks can't be mitigated by simply ceasing treatment. It looks like Bluebird Bio will be able to overcome this challenge. In June, FDA advisory committees unanimously agreed that the benefits of these two treatments outweighed the risks. The agency doesn't have to follow the advice of its independent expert committees, but they usually land on the same page.

Good stocks to buy now?

Before you run out to buy either of these stocks, recognize the risks they pose as investments. And on that score, these two stocks are about as different as they can be.

With strong cash flows driven by multiple blockbuster drugs, Bristol Myers Squibb is a relatively safe investment. The stock even pays a dividend that offers a 2.8% yield at current share prices. With Revlimid's best days in the rear-view mirror, though, eye-popping gains are unlikely in the foreseeable future.

Bluebird Bio is a hyper-risky biotech company. It finished March with just $106 million in cash after burning through $736 million over the past year. If this isn't enough to scare you away, consider beti-cel's ill-fated European launch.

A few years ago, Bluebird Bio launched beti-cel in Europe, but has since pulled it from the market due to a lack of sales. These types of once-and-done therapies need to cost more than $1 million per dose to achieve profitability, which makes selling them even more difficult than earning regulatory approval for them. With more hurdles ahead than opportunities for Bluebird Bio, it's probably best to watch its story play out from a safe distance.