Investing in biotech stocks can be a leap of faith. Many of those in the sector with the most promising therapies aren't profitable, and some have taken a drubbing so far this year. If you're investing for the long term, however, biotech companies can provide huge potential.

Instead of just looking at a company's bottom line, follow the science. Companies with breakthrough therapies offer upside for patient investors. Consider Sarepta Therapeutics (SRPT -6.98%), CRISPR Therapeutics (CRSP -3.95%) and Myriad Genetics (MYGN -3.15%). All three companies have been able to expand their pipelines by building off proprietary data.

1. Sarepta's pipeline offers an opportunity

Sarepta's stock is up more than 27% this year. It is the first company to get Food and Drug Administration (FDA) approval for therapies to treat Duchenne muscular dystrophy (DMD). This is a rare and deadly illness, with most patients dying in their 20s, and it affects six individuals in every 100,000, mostly young males, according to the Muscular Dystrophy Association.

But that's not all. Sarepta also has more than 40 other genetic therapies in development.

In the second quarter, the company reported revenue of $233.5 million, up 42% year over year. It is still ramping up its research and development and said it had a net loss of $231.5 million, or $2.65 per share, compared to a net loss of $81.4 million ($1.02 per share) in the same quarter a year ago. It also raised its guidance for the year to a range of $905 million to $920 million, which represents a rise of 28.9% at the low point and 31% at the high end.

The company's improved revenue was led by increased sales for its three approved therapies to treat DMD: Exondys 51, Vyondys 53, and Amondys 45. Each injectable therapy targets specific genetic mutations that can cause DMD.

There's also a lot of buzz regarding the company's lead therapy in its pipeline, SRP-9001, which Sarepta is developing in collaboration with Roche, to treat ambulatory DMD patients. Sarepta said it plans to submit it for regulatory approval ahead of the end of its current phase 3 trial, sometime this fall.

2. CRISPR is on the cutting edge

CRISPR Therapeutics stock is down more than 5% this year. The company is named for the CRISPR/Cas9 gene-editing technology that allows for precise, directed changes to DNA to treat various conditions.

The company has no marketed therapies yet, but it has a lead candidate, Exa-cel (exagamglogene autotemcel), that it is developing along with Vertex Pharmaceuticals. Exa-cel is in several phase 3 clinical trials to treat transfusion-dependent beta thalassemia (TDT) and severe sickle cell disease (SCD), two rare genetic blood disorders.

Exa-cel has shown the potential to be a cure for both diseases in a single dose, which understandably has scientists (and investors) excited. In studies, it eliminated the need for transfusions for TDT patients and vaso-occlusive crises (painful incidents caused by sickle-shaped cells) in SCD patients.

The company said it plans to present a Biologics License Application (BLA) to the FDA sometime in the fourth quarter, meaning it is possible the therapy could be producing revenue as early as next year. Company research indicates the target market would be more than 30,000 patients in the United States and the European Union alone.

CRISPR has two other promising blood cancer therapies in early trials: CTX-110 to treat relapsed or refractory B-cell malignancies, and CTX-130 to treat some solid tumors, such as renal cancer and various B-cell and T-cell lymphomas.

3. Myriad's data is driving its innovation

Myriad Genetics has been at the forefront of genetic testing to screen for the risk of developing diseases, the risk of a disease's progression, and for targeting treatment options.

In 1993, its scientists helped discover the P16 gene connected with hereditary melanoma. In 1994, Myriad helped discover the BRCA1 gene connected with hereditary breast and ovarian cancer, and in 1995, it helped discover the BRCA2 gene connected with hereditary breast and ovarian cancer. In 2003, Myriad, in collaboration with Abbott Laboratories, discovered the DEP1 gene connected with major depressive disorder.

The company's stock is down 11% so far this year, but in the second quarter, Myriad reported revenue of $179.3 million, up 7% year over year and 9% sequentially, excluding divested revenue. The company had a net loss in the quarter of $17.8 million, improving $3 million compared to the same period last year.

In 2021, using data from genetic testing on 275,000 women, Myriad launched the first polygenic breast-cancer risk assessment test for women of all ancestries. The company used its database to extrapolate a test that before was only used to give genetic insights on breast cancer risk to women of European descent.

Making a solid choice

None of these biotech companies is profitable, and only two of them have product revenue. But all three have enormous potential because of their breakthrough science.

Sarepta is closest to turning a profit and has had the best revenue growth over the past year, so it is probably the safest bet of the three. But CRISPR and Myriad have greater long-term potential because their products would be useful to a wider variety of populations. It might take years for any of these three to have explosive revenue growth, but before that happens, it makes sense to purchase their shares before they skyrocket.

Because of their technical expertise, all three companies also have the potential to be a buyout candidate, another scenario that would send their shares soaring.