One key reason the biotech industry has soared over the past two years is that a number of companies gained regulatory approvals for drugs with stunning commercial potentials. This industry-wide rise, however, has been pockmarked by companies whose drugs have failed to live up to expectations.

With this in mind, let's look at Cubist Pharmaceuticals (NASDAQ:CBST.DL), Flamel Technologies (NASDAQ:FLML) and NPS Pharmaceuticals (NASDAQ: NPSP) -- all of which could see revenue and earnings grow incredibly next year.

Cubist banks on new antibiotics for superbugs
Cubist's pipeline of antibiotics intended to defeat antibiotic-resistant superbugs is producing stellar results for the company. This month, Cubist gained FDA approval for Sivextro as a treatment for acute bacterial skin and skin structure infections. Sivextro will join Cubicin and Dificid in the company's antibiotic product portfolio, with a possible fourth approval for ceftolozane/tazobactam by the FDA by December. 

Experts project Cubist's earnings per share could grow remarkably by over 200% next year if ceftolozane/tazobactam also gains approval. Given that Cubist has an excellent track record of both navigating new drugs through the regulatory process and subsequently launching them into a highly competitive marketplace, I think this is a growth story worth putting on your watchlist.

NPS' earnings should get supercharged with approval of Natpara
Little-known orphan-drug maker NPS Pharmaceuticals gained some notoriety recently when it was cited as a possible takeover target by Shire (NASDAQ: SHPG). Specifically, Shire was reportedly considering an offer of $40 a share for NPS, which represented a 40% premium compared to where shares were trading prior to the rumor hitting the Street.  

What you need to understand is why Shire may have been interested and why some felt that $40 a share was actually too low. Although NPS has an approved product in Gattex as a treatment for short bowel syndrome that is performing well commercially, all eyes are on Natpara, the company's experimental treatment for hypoparathyroidism that will likely be reviewed by the FDA during the fourth quarter. 

If Natpara is approved, with peak sales potential of $250 million or more, it could drive some serious growth for a company with trailing-12 months revenue of $174 million. Put simply, I think Shire may have been attempting to scoop up this orphan-drug maker on the cheap prior to the potential approval of a major revenue driver. If you're interested in following this one more closely, keep an eye out for the Advisory Commitee meeting, which is supposed to be held on September 12th.

Flamel Technologies looks to corner the neostigmine market 
French biopharma Flamel Technologies is building a compelling growth story based on its FDA-approved Bloxiverz (neostigmine methylsulfate injection). Bloxiverz is an injected drug used primarily to reverse the effects of neuromuscular blocking agents following surgery.

There are unapproved versions of this drug on the market that Flamel hopes to have removed under the Food, Drug, and Cosmetic Act of 1938. Given that neostigmine supplies are limited and the drug is widely used in post-operative settings, it would be a major coup for the company to win exclusivity from the FDA. That could help revenue triple, from an analyst-estimated $67 million this year to $170 million next year, according to yahoo finance. 

Foolish wrap-up
Growth stocks have a place in most portfolios, but it's always important keep their risks at the forefront of your investing thesis. The growth story of each biopharma discussed above, for example, is highly dependent upon a regulatory decision surrounding one or more key products.

Given that the regulatory process is highly complex and the outcome uncertain, you should consider the likelihood and impacts of a negative regulatory decision prior to investing. That being said, these three companies offer compelling growth prospects if all goes as planned -- making them stocks to watch as they move closer to their respective catalysts.