The next 12 months could be dicey for the economy and the stock market, especially as the U.S. Federal Reserve recently predicted a recession could come by year-end. But even in this environment, some equities should perform just fine -- or even better.

Let's look at two examples: CRISPR Therapeutics (CRSP 1.05%) and Axsome Therapeutics (AXSM -5.03%). These two biotechs have important catalysts that could lead to outsized gains in the near term and, even more importantly, over the long run.

1. CRISPR Therapeutics

CRISPR Therapeutics is a gene-editing-focused biotech with no product on the market. That could be about to change. The company has submitted regulatory applications for its leading candidate, exa-cel, in the U.S. and Europe. Exa-cel is a potential therapy for a pair of blood-related illnesses: transfusion-dependent beta-thalassemia (TDT) and sickle cell disease (SCD). 

CRISPR developed exa-cel together with Vertex Pharmaceuticals. The anticipated approval has already positively affected CRISPR Therapeutics. The two partners expect to target an initial market of 32,000 patients with SCD or TDT. Furthermore, exa-cel's opportunity could expand substantially if it obtains more approvals in several other patient classes. The therapy could lead to years of growing revenue and earnings for CRISPR Therapeutics.

So if exa-cel earns approval, expect CRISPR Therapeutics' stock price to jump even more. After all, the company is still down massively since July 2021. 

Chart showing CRISPR Therapeutics' price falling since mid-2021.

CRSP data by YCharts

The biotech is developing other promising gene-editing treatments, especially in oncology. And it should be able to fund its other programs with the windfall from exa-cel if everything goes according to plan. CRISPR's shares could potentially double in the next 12 months on exa-cel's approval and clinical progress elsewhere, and the company's gene-editing platform makes it an intriguing stock to hold on to for a while. 

2. Axsome Therapeutics 

Axsome Therapeutics' stock has more than doubled over the past 12 months thanks to regulatory progress, especially the approval of its much-anticipated depression medicine, Auvelity. But the company still has plenty of catalysts ahead. One of the most promising is the planned resubmission of AXS-07, a potential therapy for migraines.

Last year, Axsome failed to earn approval for AXS-07. The U.S. Food and Drug Administration (FDA) had concerns regarding the treatment's manufacturing. Axsome was, apparently, able to resolve these concerns and got the blessing of the health regulatory agency to move forward with a resubmission. AXS-07 is almost certain to earn approval this time around -- the FDA had no issue when it came to its safety or efficacy.

What's the commercial opportunity for AXS-07? Axsome Therapeutics estimates a market of 37 million patients in the U.S., more than 70% of whom aren't satisfied with current treatment options. In a late-stage study, 39% of migraine patients on AXS-07 achieved relief in as little as one hour. The medicine could have reasonable success on the market as a fast-acting option.

This is just one of several programs for which Axsome could see solid progress over the next year. The company expects data readouts or regulatory submissions for products such as AXS-12 as a potential treatment for narcolepsy (a sleep disorder) and AXS-14 in targeting fibromyalgia (a chronic illness characterized by body pains, sleeping troubles, and other symptoms).

Based on positive developments with these programs, Axsome Therapeutics' shares should perform very well over the next 12 months. Even more importantly, the company is building an impressive portfolio that could yield excellent financial results over the long run, as it still has other programs in the works that will make progress much later. That's why investors should consider adding the company's shares to their portfolios. 

What if they don't?

The biotech industry is known for being volatile and explosive -- and not for the faint of heart. But CRISPR Therapeutics and Axsome Therapeutics have excellent prospects over the next year, and it wouldn't be surprising to see them double investors' money. Even if they fail to do so, investors should focus on the fact that both drugmakers are demonstrating the ability to develop potential blockbuster medicines -- a key ingredient for any drugmaker to be successful over the long run. That's the most important takeaway for investors.