The bear market has left plenty of stocks in the doldrums -- including those with tremendous growth prospects. This offers us an opportunity to get in on those players at a good price and benefit from their gains down the road.
Two healthcare stocks in particular have caught the attention of Motley Fool contributors Adria Cimino and Keith Speights. These stocks each fell more than 25% last year. But both of these companies have offered us solid signs that major growth is on the horizon. Let's take a closer look at these exciting players to buy right now.
Still a potential multibagger
Keith Speights (Intuitive Surgical): I have bad news, good news, and great news with respect to Intuitive Surgical (ISRG 0.44%).
The bad news is that shares of the robotic surgical systems provider plunged 26% last year and are still down nearly 30% below the high set in late 2021. This decline stemmed in part from the overall market uncertainty. Intuitive Surgical was also negatively affected by COVID-related lockdowns in China.
The good news is that Intuitive is making a strong comeback, with the stock jumping close to 40% over the past three months. Intuitive recently announced that procedures for its da Vinci robotic surgical system soared 18% year over year in the fourth quarter of 2022. The company's Q4 revenue grew 7% year over year to $1.66 billion.
But the best news -- and the top reason to buy this beaten-down stock -- is that Intuitive Surgical has a massive growth opportunity. Around 1,875,000 surgical procedures were performed with da Vinci last year. Intuitive estimates that there are roughly 6 million procedures performed annually for which the company already has products with regulatory clearances. That number could expand to 20 million with products in development and potential clearances on the way.
Intuitive Surgical is a big company with a market cap of over $90 billion. I think it still has multibagger potential over the next 20 years as more types of surgeries are performed with robotic assistance.
A huge milestone ahead
Adria Cimino (Crispr Therapeutics): Crispr Therapeutics (CRSP 2.09%) dropped 46% last year. This happened even as the company moved toward its biggest milestone ever: potential product commercialization.
Crispr announced positive data from a phase 3 trial of exa-cel, its treatment candidate for blood disorders, earlier in the year. It went on to file for regulatory approval in the U.K., Europe, and the U.S. It expects to complete the U.S. submission by the end of this quarter.
In a partnership with Vertex Pharmaceuticals, Crispr will keep 40% of eventual profits. Even though Vertex gets the biggest share, exa-cel still could result in a significant revenue stream for Crispr. Regulators are considering exa-cel for the treatment of adults with sickle cell disease or beta thalassemia. Today, treatment options for these illnesses are limited. So the door to huge market share is wide open.
Potential exa-cel approval is key for another reason. It would validate Crispr's gene-editing technology. Exa-cel is designed as a one-time curative treatment. Success with this highlights the potential of Crispr's technology in other disease areas.
The biotech company also is studying exa-cel in a phase 3 trial for pediatric patients. This could expand the patient population -- and revenue opportunity. And Crispr may have another revenue driver in the not-too-distant future. The company's immuno-oncology candidate CTX-110 showed positive results in its two-part phase 1 trial. It's now moving into a phase 2 trial that could directly support a regulatory submission.
It's difficult to value Crispr using traditional methods since it doesn't yet have product revenue. But late-stage trial data shows the strength of its technology. If all goes well during regulatory review, exa-cel could soon launch -- and give Crispr its first product revenue. And CTX-110 may not be too far behind.
Crispr shares have lost more than 70% since a peak back in 2021 -- when we had less visibility on product commercialization. All of this means Crispr is looking like a smart stock to buy right now.
So should you buy Intuitive or Crispr?
Which stock to buy may depend on your investment style. Intuitive carries less risk since it already is generating revenue and profit from its surgical systems -- and is a market leader. Cautious investors may prefer this company.
Crispr could appeal to investors with a bit more appetite for risk since it hasn't yet won approval for its candidates. But the company is getting close to the product commercialization finish line -- so it offers potential for big gains if it wins approval and eventually meets or beats revenue expectations.
Finally, if you like to balance safe stocks with those that carry a bit of risk, you may want to bet on both of these players right now -- and watch how these exciting stories evolve.
