Growth stocks turned in a forgettable performance in 2022. This reversion to the mean across the growth equity landscape, though, has created some unique buying opportunities for savvy investors.

In biotech, for instance, scores of companies shed value at a dizzying pace in 2022, despite their significant progress in the clinic or on the commercial front. As a direct result of this value disconnect, there have already been a handful of premium-laden buyout deals in the downtrodden biotechnology space in 2023. 

The lesson is that industry insiders don't necessarily agree with the market's rather dour take on biotech valuations at the moment. In fact, there are a handful of developmental and early commercial-stage biotech companies that come across as absurdly undervalued right now, thanks to this risk-averse behavior by the broader markets. 

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Which biotech stocks should investors have on their radar? These two companies could deliver tantalizing gains for risk-tolerant shareholders in 2023 and beyond. Here is a brief rundown on the underlying value proposition associated with each stock at this crucial juncture in their respective life cycles.   

1. Heron Therapeutics

Heron Therapeutics (HRTX -4.86%) is a potential comeback story in the making. The drugmaker's shares have lost more than 91% of their value over the past five years due to poor financial results, regulatory delays, and the unexpectedly slow commercial ramp-up for its Zynrelef, an opioid alternative for postoperative pain.

Speaking to this last point, Zynrelef was initially billed by analysts as a possible blockbuster treatment due to the enormous need for alternatives to opioids for pain after surgery. Yet the drug generated a mere $3.9 million in sales in the latest quarter. 

With losses mounting, Heron decided to hire industry veterans Craig Collard as CEO and Adam Morgan as chairman earlier this month. And in the immediate aftermath of these executive changes, Heron also appointed Jason Grillot as vice president for sales and marketing, acute care. Grillot will essentially be tasked with beefing up sales of the company's acute-care franchise.

Now, this leadership turnover doesn't necessarily mean that Heron's financial results will improve overnight. But the company does have a major asset that appears to be drastically underperforming. Hence, a new approach could radically alter the company's trajectory. This possibility, though, might take several quarters to come to fruition.

That being said, Heron's stock could be significantly undervalued in the event this new management team can right the ship. 

2. Roivant Sciences

Roivant Sciences (ROIV -1.24%) is a highly diversified therapeutic company with a unique business model. Specifically, the company identifies inefficiencies in the drug development and commercialization process and subsequently uses specialized subsidiaries called Vants to take advantage of these inefficiencies.

By doing so, Roivant has been able to build out a highly successful pipeline consisting of therapies for autoimmune disorders, rare blood diseases, and cancer, among others. At present, the company has one commercial-stage product in the U.S., Vtama cream, for the treatment of adults with plaque psoriasis. 

In addition, Roivant has six compounds in mid- to late-stage development. Among these assets, the company's newly acquired irritable bowel syndrome therapy, RVT-3101, could be a game changer for patients and shareholders alike.

In late 2022, Roivant signed a collaboration agreement with Pfizer to develop the therapy for both ulcerative colitis and Crohn's disease. The big deal is that Merck just paid an enormous premium to acquire a similar therapy -- one that might not be as effective as RVT-3101 in these high-value settings. 

If successful in late-stage trials, RVT-3101 could easily generate mega-blockbuster sales (greater than $5 billion) in the U.S. That's a tremendous commercial opportunity for a company with a $6.5 billion market cap at the time of this writing.