Stocks don’t go up in a straight line, so it can pay off to prepare for inevitable dips by compiling a watch list of top stocks to buy on sale. If you haven’t put together your list yet, it could be the perfect time to do so, given the stock market’s recent shakiness. While there are a lot of great stocks to consider buying if the stock market crashes, Guardant Health (NASDAQ:GH), Novocure (NASDAQ:NVCR), and Veeva Systems (NYSE:VEEV) are three fast-growing healthcare stocks that I think ought to be on your radar.
A key cog in the fight against cancer
Cancer remains tough to treat, but patients are beginning to benefit from a greater understanding of the genetic drivers behind their disease thanks to Guardant Health’s blood tests. The company’s tests provide valuable genetic insight into what drugs are likely to work best in advanced cancer patients, and someday they may also be used to detect cancer recurrence or cancer when it’s in its earliest stages.
In Q1, Guardant Health’s sales rocketed 120% higher year over year to $36.7 million because more doctors ordered tests for advanced cancer patients and more drugmakers used tests to determine candidates for next-generation cancer drugs in development.
The company’s tests offer a distinct advantage over traditional tissue biopsies, because biopsies can be painful and costly, and they may not provide enough material for clinicians to evaluate every possible genetic biomarker. The company estimates that testing in the metastatic cancer market alone represents a $4 billion opportunity. Testing patients enrolled in ongoing clinical cancer trials increases the addressable market by an additional $2 billion.
Guardant’s future growth isn’t limited to those two markets, though. In the future, it hopes to become a big player in testing for cancer recurrence in patients in remission and detecting cancer in patients at elevated risk for developing cancer. It estimates that those two markets could be worth $15 billion and $18 billion, respectively.
Since cancer treatments are getting increasingly complex and Guardant’s sales are already reflecting rapidly rising demand for its blood tests, I don’t think it’s a stretch to say revenue is going to continue heading higher, rewarding investors willing to step up and buy shares if they tumble.
A novel medical device for cancer treatment
Investors interested in cancer treatment companies is typically focused on drugmakers. However, NovoCure has developed a medical device called Optune that’s already being used to help brain cancer patients.
Optune uses low-intensity, alternating electrical fields to impede cancerous cell division. It’s a non-toxic approach, so it can be used alongside chemotherapy without adding to the negative toll chemotherapy takes on patients.
Until recently, Optune’s only FDA-approved use was in glioblastoma, a fast-growing brain cancer with a poor prognosis. However, it recently secured an FDA OK for use in mesothelioma, and trials are ongoing that could someday allow its use in larger indications, including non-small-cell lung cancer and pancreatic cancer.
Use of Optune has been growing steadily as doctors have become more convinced of its efficacy. In 2014, there were only a couple of hundred patients using it, but that number climbed to 1,200 in 2017, and currently there are 2,600 patients using it. As a result, Novocure’s revenue reached $73 million in the first quarter of 2019, up 41% from one year ago.
Given there are 12,500 glioblastoma patients and 2,500 mesothelioma patients who could benefit from Optune, there’s still plenty of room for future revenue growth, especially if Optune eventually wins an OK for use in increasingly more indications…
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