3 Under-the-Radar Healthcare Stocks Worth Adding to Your Watchlist
Key Points
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All three drugmakers have proven fairly innovative in their respective niches.
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Clinical and commercial progress could send their share prices soaring.
A few healthcare companies garner much of the attention in the sector. The list includes Eli Lilly, Johnson & Johnson, UnitedHealth Group, and several others. However, beyond those giants, there are plenty of lesser-known healthcare stocks worth serious consideration. Let’s consider three of them: Krystal Biotech (NASDAQ: KRYS), Madrigal Pharmaceuticals (NASDAQ: MDGL), and Exelixis (NASDAQ: EXEL). Here is why these three biotech companies are worth adding to your watch list, despite not being major players in the industry.
Doctor and patient in a hospital room.
Image source: Getty Images.
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1. Krystal Biotech
Kystal Biotech focuses on developing medicines for rare diseases. In 2023, the company earned approval for Vyjuvek, a gene therapy for Dystrophic Epidermolysis Bullosa (DEB), a genetic disorder that makes patients’ skin extremely fragile. People with DEB suffer injuries and blisters from minimal friction. Vyjuvek was the first therapy approved in the U.S. to treat it, and since then, it has made significant commercial progress.
Last year, Krystal Biotech, whose only marketed medicine is Vyjuvek, reported revenue of $389.1 million, an increase of 34% year over year. The company posted a net profit, with earnings per share rising 128% year over year to $6.84.
Krystal Biotech still has a vast runway for growth in the DEB patient population, especially as the company has earned approval for Vyjuvek in other regions, including Europe and Japan. Further, the biotech company has a robust pipeline of products targeting several other diseases. Provided it can make solid clinical and regulatory progress while maintaining strong momentum for Vyjuvek, its revenue, earnings, and share price could continue to move in the right direction.
2. Madrigal Pharmaceuticals
Madrigal Pharmaceuticals also made a significant breakthrough in 2024, receiving FDA approval for Rezdiffra, the first medicine for metabolic dysfunction-associated steatohepatitis (MASH). Rezdiffra is under accelerated approval, meaning ongoing confirmatory clinical trials are assessing its efficacy; if these fail, it could be removed from the market.
However, that has not stopped physicians from prescribing Rezdiffra. In 2025, Madrigal Pharmaceuticals’ revenue totaled $958.4 million, an increase of 432% year over year, driven by Rezdiffra, its only approved product. The therapy’s momentum is understandable. MASH affects a large number of patients — millions, by some estimates — and until Rezdiffra, there was no treatment option specifically for it.
Madrigal Pharmaceuticals is doubling down. There were 36,250 patients on Rezdiffra as of the end of 2025, a small number compared to the 315,000 people with the moderate-to-advanced fibrosis (scarring) who are seeing specialists that the company plans to target. Beyond Rezdiffra, Madrigal Pharmaceuticals has several other MASH-focused pipeline candidates that could help it boost its addressable market. The stock could deliver excellent returns as it gains market share in this niche.
3. Exelixis
Exelixis is an oncology specialist. The company’s most important medicine, Cabometyx, treats some forms of liver and kidney cancer. Cabometyx has earned numerous indications — including as a combo treatment — while remaining the most prescribed medicine of its type in renal cell carcinoma. It has been Exelixis’ main growth driver for years, and it should remain so until it starts facing generic competition in early 2030.
By then, Exelixis’ approved medicines lineup should look different. Exelixis is developing several next-gen cancer therapies, including one called zanzalintinib, which is being considered for approval as a combo treatment for colorectal cancer (CRC), an area with high unmet need, considering that CRC is the second-leading cause of cancer death worldwide.
Exelixis has several other pipeline candidates that should make progress in the next five years. The company is a proven innovator in oncology, a niche typically dominated by the largest pharmaceutical companies. That, combined with Exelixis’ strong financial results, makes the stock worth serious consideration.
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Prosper Junior Bakiny has positions in Eli Lilly, Exelixis, and Johnson & Johnson. The Motley Fool has positions in and recommends Exelixis and Krystal Biotech. The Motley Fool recommends Johnson & Johnson and UnitedHealth Group. The Motley Fool has a disclosure policy.
