The holy grail of drug development is launching a billion-dollar blockbuster therapy, but that isn't easy to do. It costs more than $1 billion to usher compounds through expensive clinical trials (including failures) and just 10% of drugs in pipelines ever make it to market.

The hit-and-miss nature of the industry suggests that only the most sophisticated (and risk-taking) investors should buy biotechnology stocks, but for those who invest in the space there are few things as profit-friendly as catching a billion-dollar blockbuster in the making.

That leads me to Medivation (MDVN), Ophthotech (ISEE), and Portola (PTLA), three companies with important therapies that may very well be destined to become top sellers.

MDVN Chart

MDVN data by YCharts.

Source: Medivation

Expanding the label
Medivation has the distinction of being the only one of these three companies to have a drug on the market.

The fast-growing Xtandi (a joint product with Astellas) has been nibbling at Johnson & Johnson's heels since winning approval as a treatment for post-chemotherapy metastatic-castration resistant prostate cancer, or mCRPC, in 2012.

Xtandi has already unseated J&J's Zytiga as the market share leader in this small indication, but a much larger payday is coming if the FDA approves Xtandi for use in pre-chemotherapy mCRPC patients.

In December 2012, the FDA approved a similar label expansion for Zytiga, which quickly became a blockbuster. Zytiga's sales totaled $1.7 billion in 2013 and climbed another 45% to $1.07 billion in the first six months of this year.

Xtandi is already being prescribed to pre-chemo patients off-label, and phase 3 trials show that patients using the drug were able to delay chemotherapy by 11.2 months, versus just 2.8 months with the placebo.

The FDA is expected to rule on the label expansion on Sept. 18. If approved, Xtandi revenue will likely jump significantly from the $172 million it notched globally in the first quarter.

Source: Regeneron.

Playing well with others
Ophthotech isn't your typical biotechnology company. Instead of developing a drug that can replace existing therapies, it's working on a drug that can be used alongside them.

The company's Fovista successfully boosted eyesight in patients with wet age-related macular degeneration, or AMD, by 10.6 letters when used alongside Novartis' blockbuster drug Lucentis, versus 6.5 letters for Lucentis alone.

Lucentis racked up $619 million in sales during the second quarter for Novartis, which owns foreign rights to the drug, and more than $4 billion for Novartis and Roche (its U.S. partner on the drug) in 2013. And it's not the only drug Fovista may help work better.

Ophthotech is also studying Fovista alongside Regeneron and Bayer's fast-growing wet-AMD treatment Eylea. Since gaining FDA approval in 2011, Eylea has quickly won away market share from Lucentis, with total global sales clocking in at more than $500 million in the first quarter of this year.

Ophthotech's gamble to position Fovista as an adjunctive treatment rather than a stand-alone drug is already paying off. Last month, Novartis, eager to defend its Lucentis franchise, paid $200 million up front and agreed to pay as much as $1 billion in milestones, plus royalties, to lock up international rights to market Fovista if and when it passes muster with regulators.

Counting on a competitor
It's not often that big drugmakers root for competitors, but that's exactly what's happening with Portola.

Portola is working on a factor Xa decoy, a drug that has the very unique (and important) ability to reverse the anticoagulant effects of the latest factor Xa clot-busting drugs from Johnson & Johnson, Bristol-Myers Squibb, and Daichi.

Johnson & Johnson, which is partnered with Bayer on Xarelto, and Bristol, which is partnered with Pfizer on Eliquis, are already making big money selling their factor Xa alternatives to the side effect-laden warfarin, but sales could truly soar if an effective antidote wins approval.

Johnson's Xarelto sales rose 91% to $361 million in the second quarter, while sales of Bristol and Pfizer's Eliquis jumped from $22 million in the first quarter of 2013 to $106 million in the first quarter of 2014 (the companies have yet to report second-quarter numbers).

Those big-selling drugs will likely soon be joined by another factor Xa anticoagulant made by Daichi, and all those approvals aim to dislodge warfarin's decades-long stranglehold on the market.

That means Portola's reversal drug will be relied upon heavily in hospital settings, but Portola isn't stopping there. It is ushering its own factor Xa drug, betrixaban, through phase 3 trials, positioning it to compete directly against these collaborators.

Source: Portola.

Fool-worthy final thoughts
All three of these companies have significant potential but come with risk.

Xtandi has the potential for label expansion in prostate cancer and may have potential as a breast cancer treatment, but it's Medivation's only drug. Johnson & Johnson in 2013 acquired a potential second-generation version of Xtandi, ARN-509, that was developed in the same lab at UCLA and could someday displace it. Ophthotech and Portola similarly have uninspiring pipeline depth. The only other drug under development at Ophthotech is Zimura, another treatment for AMD. Beyond its factor Xa decoy and factor Xa anticoagulant, Portola's pipeline includes just two other early stage compounds. That said, for aggressive investors willing to take risk, all three companies may deliver significant sales over time that could prove profit-friendly.