Revolutionary stocks can be new or old, big or small, but they need novel ideas to break away from other companies, or at least the capacity to take new ideas to another level. Eli Lilly (LLY 1.96%), CRISPR Therapeutics (CRSP 1.35%), and Johnson & Johnson (JNJ 0.29%) have all been doing so.

The three companies are on the cutting edge of ideas that are changing the healthcare industry. Eli Lilly and CRISPR are developing radical new therapies, while Johnson & Johnson is going all-in on using artificial intelligence to bring new therapies to market more quickly.

On top of that, all three companies have had consistent revenue growth and two of the three have beaten the S&P 500 so far this year.

Eli Lilly: Stable, yet revolutionary

It's hard to see Eli Lilly as a revolutionary stock. The pharmaceutical company was formed in 1876 by a Civil War veteran and has been in the S&P 500 since 1971. However, the company has been on the forefront of two of the biggest medical breakthroughs this year: Alzheimer's drug donanemab and diabetes drug Mounjaro (tirzepatide), which is seen as a potential obesity game-changer.

On Nov. 30, Lilly said that donanemab, in its phase 3 study of early Alzheimer's patients, reduced amyloid plaque compared to Aduhelm, developed by Biogen. Donanemab is a monoclonal antibody that targets N3pG, a beta amyloid plaque often connected with Alzheimer's patients. Until this year, companies had struggled to find a therapy to treat Alzheimer's because of the blood-brain barrier. Now, there are two therapies that could slow Alzheimer's, and Lilly appears to have the superior one.

In the study, Lilly's donanemab was tested on 148 early Alzheimer's disease patients from ages 50 to 85. After six months, donanemab cleared amyloid plaques in the brains of 38% of patients, compared to only 2% given Aduhelm, the only amyloid-plaque reducing drug approved by the Food and Drug Administration (FDA). The typical patient saw a 65% decline in amyloid plaques compared to just 17% for those given Aduhelm. 

Donanemab hasn't been approved yet by the FDA, but Lilly's Mounjaro was approved in May to treat obesity connected with type 2 diabetes and in October was granted fast-track designation by the FDA to treat obesity. The drug is the first to be as effective as surgery in reducing weight. While insurers haven't typically paid for weight-loss therapies, the demand is high and if Mounjaro can reduce cardiac events by reducing weight, payers will undoubtedly come around. Obesity-related healthcare costs were an estimated $260.6 billion in 2016, according to a 2021 report.

Lilly's shares are up more than 33% so far this year, buoyed by the new therapies and the company's already strong financials. In the quarter, the company reported revenue of $6.9 billion, up 2%, year over year and net income of $1.45 billion, up 31% over the same period in 2021, along with earnings per share (EPS) of $1.61 compared to $1.22 in the third quarter of 2021.

CRISPR Therapeutics has several potential blockbusters

CRISPR Therapeutics uses its CRISPR/Cas 9 gene-editing platform to find novel therapies to treat serious diseases. It's not the only company focusing on that specific type of gene editing, but it's the best pick of the group. 

It is partnering with Vertex Pharmaceuticals on exa-cel (exagamglogene autotemcel), a treatment that could cure beta thalassemia and sickle cell disease, two rare genetic blood diseases that require regular blood transfusions.

CRISPR doesn't have a marketed product yet, but it expects to complete its New Drug Application for exa-cel to the FDA in the first quarter of 2023 and its submissions in Great Britain and the rest of Europe later this year.

The excitement around CRISPR is that the company has come up with one curative therapy, so others could be on the way. 

CRISPR's stock is down more than 26% so far this year and it isn't profitable. In the third quarter, CRISPR only had $100,000 in collaboration revenue and it reported a net loss of $174.5 million. However, it is in a strong cash position with $1.9 billion, enough to fund the company's operations for years. If the company can successfully market exa-cel, that would send CRISPR stock soaring.

Its next therapy that could come to the fore is CTX130, which did well in a phase 1 trial to treat advanced clear cell renal (kidney) cancer. It is also in early trials to treat several blood cancers. In the kidney cancer trial, the therapy achieved a disease control rate of 77% in patients who had prior therapies.

Johnson & Johnson at the AI forefront

Johnson & Johnson, like Lilly, has its roots in the 19th century. However, the healthcare giant is known for its innovation and is on track to spend $13 billion or more this year on research and development. To save costs and speed products to market faster, the company has invested heavily in using predictive analysis, a machine learning process that uses big data to predict outcomes.

Janssen, a subsidiary of Johnson & Johnson, found that using artificial intelligence for new drug discovery can be up to 250 times more efficient than prior methods. The subsidiary paired with professors from European colleges to find computer algorithms to predict how different body cells will react to familiar compounds.

Johnson & Johnson has invested in Datavant Holdings, which uses big data across healthcare organizations to help medical research and patient care. The company has also partnered with Aetion, which uses electronic medical records to determine the value, safety, and effectiveness of medications.

The use of AI can be hard to measure, but it certainly hasn't hurt the company's bottom line. In the third quarter, Johnson and Johnson's reported revenue of $23.8 billion, up 1.9% year over year with EPS of $1.68, was up 22.6% over the same period last year.

The company said it expects to make yearly revenue between $93 billion and $93.5 billion, up 2.1% at the midpoint. So far this year, the stock is up more than 4.5%.