As imposing of a business as internet giant Alphabet (GOOG -0.45%) (GOOGL -0.51%) may be, it hasn't fared very well in the bearish conditions of the market lately. In the last year, spurred by tightening financial conditions and a general environment of uncertainty, its shares have fallen by 25%, significantly more than the market's decline of 13%.
Though it's likely the business will soon recover, in the meantime investors are apt to look for growth elsewhere -- and the following two healthcare companies aren't falling victim to the same struggles. Let's evaluate these two winners of the bear market to see if they could continue to outperform.
1. ShockWave Medical
Thanks to the modern lifestyle, many people have arteries that are a little bit worse for wear, with thin plaques of calcium lining and clogging up the interior arterial spaces where blood would ideally flow unimpeded. ShockWave Medical (SWAV 4.38%) makes a device that uses concentrated and judiciously targeted sound waves to break up those calcium plaques, saving patients from further damage incurred by their chronic heart disease.
For the device to be used in different cardiovascular sites, it designs tool heads specialized for various diameters and other location-specific challenges, and it currently has five such attachments on the market. Importantly, developing new tool heads and getting them approved for new indications (and in new regions) is how ShockWave will be able to keep growing and reward its shareholders over time.
And since its hardware appears both safer and more effective than the traditional approaches to treating stiff arteries, the company stands a good chance of displacing existing solutions on the market.
So investors shouldn't assume that the company's existing markets are in any way tapped out, even though they're busy with competitors deploying older technologies. In the last three years, quarterly revenue rose by an impressive 965%, reaching more than $120 million as of the second quarter -- and most of that growth occurred after the middle of 2020.
In other words, the company is only now hitting its stride, with the launch of its Shockwave C2 in early 2021 leading the charge. This year, management is banking on the company's top line to nearly double its $237.1 million in 2021. As good as Alphabet may be, it definitely can't expand its revenue that quickly given its massive size. And that's why ShockWave is likely to outperform it, and the wider market, too.
2. Alnylam Pharmaceuticals
Much like ShockWave Medical, Alnylam Pharmaceuticals (ALNY 1.88%) has a handful of promising products on the market. In fact, its drug Amvuttra for hereditary transthyretin amyloidosis (hATTR) -- a rare disease involving genetic mutations -- launched in Q2 and is its fifth medicine to hit the market in the last four years. That should help its revenue to ramp up for the next few years. Management anticipates making up to $930 million in sales this year. For reference, 2021 saw the company's revenue surpass $844 million, though profitability remains elusive.
The need to eventually become profitable aside, expanding the indications of its existing medications will be a major reason for Alnylam to keep performing strongly amid the bear market and far beyond. By 2024, it could have at least four additional indications approved for its medicines patisiran and vutrisiran, both of which are already big earners.
Plus, many of the conditions it targets are rare, with small patient populations that have no other options for treatment. That means if Alnylam can successfully develop a therapy, it should have unimpeded access to the market, not to mention a bevy of government-sponsored benefits to reduce research and development (R&D) costs while increasing its profit potential.
Still, management has its sights set on expanding into more common illnesses, too. Its mid-stage pipeline programs include candidates to treat hypertension, which could be a major moneymaker. If its clinical trials continue to succeed, it'll be positioned to enter new disease areas by the middle of the decade, and that should keep juicing its top-line growth through 2030.
While it might not expand faster than Alphabet forever, the next few years are especially jam-packed with clinical trials, regulatory decisions, and ongoing commercialization efforts -- and potentially positive outcomes in all of those domains that should help it outperform regardless of what's going on in the market.