Belite Bio(NASDAQ: BLTE), TransMedics Group(NASDAQ: TMDX) and Rhythm Pharmaceuticals(NASDAQ: RYTM) set themselves apart over the past year with triple-digit share price gains.
Each of the healthcare companies is developing something unique, whether it be finding treatments for maladies with no approved treatments, a more effective way to do organ transplants, or a more precise way to treat disorders that lead to obesity.
That uniqueness is why I see these stocks continuing their growth, making them good long-term investments.
Belite Bio sees a bright future ahead
Belite Bio is a clinical-stage biopharmaceutical company that focuses on therapies to treat blindness, diabetes, and liver disease. The company's shares are up more than 181% since its IPO on April 29, 2022. It's one of the few biotech companies whose shares have thrived after their IPOs in 2022. For the first half of 2022, the company reported cash of $48.7 million and a net loss of $3.7 million. It has no marketed products and no revenue yet.
The company's lead therapy, Tinlarebant (LBS-008), is in clinical trials to treat Stargardt disease. This genetic disorder causes progressive vision loss and dry age-related macular degeneration (AMD), the leading cause of central vision loss in those over 50.
There are no approved treatments, and the market potential for Tinlarebant, taken orally, is large if it's approved. There are nearly 20 million adults in the U.S. with some form of macular degeneration, and the number worldwide with macular degeneration is expected to reach 288 million by 2040. The incidence rate for Stargardt disease is between 1 in 8,000 people to 1 in 10,000 people. Tinlarebant is in a phase 2 study for Dry AMD and a phase 3 study to treat Stargardt Disease, so it is progressing fairly quickly.
Belite has another drug in the pre-clinical stage, LBS-009, to treat non-fatty liver disease and type 2 diabetes.
TransMedics is changing organ transplants
There aren't a lot of companies whose products are truly transformative in that they can change their industries like TransMedics Group can.
Its Organ Care System (OCS) has changed how organ transplants are done, because the company's products keep organs alive and viable longer. The OCS keeps organs metabolically active by perfusing them in warm, oxygenated blood. The company has more than 200 issued and pending patents to protect its OCS platform through the late 2030s.
Internationally, according to the Global Observatory on Donation and Transplantation, there were 144,302 transplants performed in 2021. This included kidney transplants (92,532), liver transplants (34,694), heart transplants (8,409), lung transplants (6,470) and pancreas transplants (2,025).
TransMedics has already gotten approval from the U.S. Food and Drug Administration (FDA) for its OCS to perform lung, heart, and liver transplants. It's awaiting approval for its OCS to perform kidney transplants, which would really unlock the potential for the company's revenue.
TransMedics reported third-quarter revenue of $25.7 million, up 378%, year over year. The company is on track to bring in yearly revenue of between $80 million to $85 million, an increase of 164% to 181% over last year. Through nine months, it reported revenue of $62 million, up from $20.6 million in the same period last year, and a loss per share of $1.03 compared to a loss of $1.14 in the first nine months of 2021.
Not surprisingly, the company's stock has climbed more than 152% over the past year.
Rhythm focuses on obesity treatment
Rhythm Pharmaceuticals develops peptide therapeutics to treat gastrointestinal diseases and genetic disorders. Its shares rose more than 310% over the past year.
The driver for that climb is Imcivree (setmelanotide), which has been approved to treat obesity stemming from several rare genetic disorders. The drug also recently received FDA Breakthrough Therapy designation to treat hypothalamic obesity, with a phase 3 trial expected early this year for that indication. Hypothalamic obesity is caused by physical or inborn damage to the part of the brain that makes hormones.
Through nine months, the company reported revenue of $8.1 million, compared to $1.3 million a year ago. It isn't profitable, losing $138.6 million through nine months, compared to a loss of $26.7 million in the same period in 2021.
The company is regularly adding label expansions for Imcivree. It's not far-fetched to see it having applications for diabetes patients or those whose excess weight puts them at a greater risk of heart failure or other maladies. Consider the buzz around tirzepatide from Eli Lilly, which is approved to treat Type 2 diabetes, but also being fast-tracked by the FDA as a potential obesity treatment.
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Jim Halley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends TransMedics Group. The Motley Fool has a disclosure policy.
