Cathie Wood's ARK Innovation ETF (ARKK -2.12%) is down by more than 56% this year, and it might have further to fall. That means there are likely bargains to find amid the ETF's holdings, many of which are candidates to become the disruptively innovative monster stocks of tomorrow. 

In that vein, two aspiring biomedical businesses are a bit worse for the wear of the bear market despite Cathie Wood's continued confidence in their success. Both are only suitable for risk-tolerant investors. But for the daring, there might be an opportunity.

So let's see where each is planning to go over the next few years.

1. 10X Genomics

10X Genomics (TXG -3.49%) sells laboratory analyzer devices used to profile gene expression in cells. With its hardware, users can get thousands upon thousands of data points about what cells are doing at any given moment, which is very useful information for all sorts of different applications in biomedicine. But it's been a challenging environment for its shares, which are down by more than 78% in the past 12 months.

The trouble with 10X Genomics is that its growth seems to be leveling off, causing investors to revise its future earnings potential sharply downward. Over the past three years, its quarterly revenue rose around 87%, but the first two quarters of this year saw its top line fall twice consecutively. In the second quarter, its revenue fell by around 1% year over year to $114.6 million.

It still isn't profitable, so flat-lining revenue growth is not very encouraging news for investors, and management expects a gain of only 2% to 6% in total revenue for 2022.

There are a couple of ways that the company could recover from its recent tumble, including the launch of a new device that should be on the market in 2023. Another way would be if the macroeconomic issues that management blames for weak sales were to blow over. 

But neither of those two possibilities make for a compelling long-term investment thesis, and the risks that the company might be reaching the end of its target market or perhaps failing to steal enough market share from competitors for it to be viable are substantial.

If you were to make a $1,000 investment in 10X Genomics, it's more probable you'd lose at least some of your money over the next year. There is, however, a chance that the business will be able to find fresh growth in its international markets, where it derives more than 50% of its sales already.

In that case, it could return to faster-paced growth, but it's still hard to see it outperforming the market, and catalysts for shareholder returns will likely remain few and far between.

2. Twist Bioscience

Twist Bioscience (TWST -1.45%) offers a variety of different solutions for synthetic biology applications, ranging from making high-quality bespoke gene sequences to generating antibody libraries as a service. If none of those tasks sound remotely familiar, don't worry. You can think of it as a company that efficiently manufactures whichever sequences and formats of DNA its  corporate customers need for their own purposes like biomedical research or drug development.

Twist's secret weapon is its DNA synthesis platform, which enables it to create made-to-order DNA sequences at around 1,000 times the throughput of traditional, non-automated techniques. Its platform also uses a vastly smaller amount of chemical reagents in the sequencing process, thereby enabling it to offer tremendously lower costs per strand of DNA than older and lower-throughput methods. That means collaborators in biopharma should be clamoring to get their DNA synthesis needs met by working with the company.

The trouble is, its shares tumbled by around 64% over the last 12 months despite steady top-line growth. Since three years ago, its quarterly revenue has been up by 257%, with hardly any bump in the road, and its quarterly gross margin is widening too. On average, analysts expect it to fatten its top line by around 26.5% in 2023, which isn't half bad. 

So what's the issue with Twist Bioscience stock? In short, it isn't profitable, so its goals of mastering low-cost DNA synthesis at scale remain somewhat tenuous, and there is a moderate risk that it'll never find a way to make its economic proposition work for shareholders. Plus, it doesn't help that growth stocks are very much out of the market's favor at the moment. 

There's still a chance that a $1,000 investment in its shares might grow over the next decade. Just make sure you're comfortable with the risk of long-lingering unprofitability and near-term headwinds from the market.