Equity markets have been bruised and battered in the past 12 months, but over the past decade, stocks have performed well. That's the great thing about focusing on the long game. The U.S. market is highly likely to deliver attractive returns over periods of five years or more. Of course, it's essential to carefully pick and choose which companies to invest in to benefit from that strategy.

With that said, let's consider two biotech stocks that could deliver outsized returns in the next decade: Regeneron Pharmaceuticals (REGN -0.70%) and Sarepta Therapeutics (SRPT 3.31%).

1. Regeneron 

One of the keys to success for biotech companies is the ability to develop newer medicines. That is one thing Regeneron is good at doing.

Last month, it submitted an application to the Food and Drug Administration (FDA) for a high-dose, 8-milligram (mg) formulation of Eylea, its blockbuster product that treats wet macular degeneration, an eye disease that causes blurred vision. Regeneron markets Eylea with Bayer. Here's why this new development will be important for Regeneron.

First, the 8-mg formulation of Regeneron's Eylea proved just as effective as the current 2-mg formulation, even at 12- and 16-week dosing intervals, compared to the 8-week schedule for the currently commercialized version of the medicine. It will allow patients to undergo fewer injections of the therapy, which would be a major selling point.

Second, Eylea's composition of matter patent in the U.S. is due to expire this year, opening the door for biosimilar competition. The new, higher-dose formulation should help Regeneron sidestep this issue.

The company's other blockbuster, eczema treatment Dupixent, is still going strong and earning approvals in new indications. Regeneron shares the rights to Dupixent with Sanofi. In late January, this medicine earned approval in Europe as a treatment for eosinophilic esophagitis, a chronic disease that affects patients' esophagus and causes symptoms including difficulty swallowing. Dupixent was granted the green light by regulators in the U.S. to be used to treat that illness in May 2022. It is the first and only approved targeted medicine for eosinophilic esophagitis in both regions.

Regeneron has plenty of other exciting candidates. The biotech boasts nearly four-dozen ongoing clinical trials. While Regeneron's sales dropped last year, that was due to a decline in revenue for its coronavirus-related products. Regeneron's top line decreased by 24% to $12.17 billion in 2022. But excluding its coronavirus-related sales, its revenue increased by 17%.

Pandemic dynamics should soon stop impacting Regeneron's results, and its revenue will eventually return to growth, especially after it earns approval for the new formulation of Eylea. Expect other approvals and label expansions beyond that, providing a solid foundation for Regeneron to deliver excellent returns over the next 10 years.

2. Sarepta Therapeutics 

Sarepta Therapeutics develops medicines for rare diseases; all of its currently approved treatments are for Duchenne muscular dystrophy (DMD), a genetic, progressive neuromuscular condition that typically affects boys. Patients have average life expectancies much lower than the rest of the population. Sarepta has earned approval for three medicines for this condition.

In 2022, Sarepta Therapeutics' revenue increased by about 33% to $933 million. However, it remains unprofitable. Last year, it reported a net loss of $8.03 per share compared to a $5.15 net loss in 2021. The good news is that the biotech isn't done innovating in the DMD market. 

Last year, it submitted an application to the FDA for another potential DMD medicine called SRP-9001, the rights of which it will share with Switzerland-based biotech giant Roche. The FDA set a PDUFA action goal date (the latest date by which it should complete its review of the application) of May 29. The company expects peak annual sales of $4 billion for SRP-9001.

Sarepta Therapeutics is working on many other candidates, with over 40 pipeline programs. Some also target DMD, but the company is also going after other rare illnesses such as Limb-girdle muscular dystrophy. Sarepta Therapeutics' gene therapy platform should continue to deliver breakthroughs in the next 10 years, allowing the company to increase its revenue and erase the red ink on its bottom line.

That's why Sarepta Therapeutics is a solid stock for the next decade.