Adding $ 5,000 to these 2 top stocks could make you richer in 2021 (and beyond)

According to the United States Centers for Disease Control and Prevention (CDC), cancer is the second leading cause of death in the United States (behind heart disease), killing 599,601 in 2019. On the bright side, there have been notable progress in the multi-pronged approach to combat this disease. One area in which scientists are making substantial progress is in cancer diagnosis.

This market was valued at $ 144.4 billion in 2018 and will continue to grow at a compound annual growth rate (CAGR) of 7% through 2026, according to research firm Grand View Research. Buying stocks of leading companies in this field could generate some juicy returns down the road. Two actions focused on cancer diagnosis are worth buying Exact Sciences (NASDAQ: EXAS) and Guardian health (NASDAQ: GH). Here’s why a $ 5,000 investment in either (or both) of these companies would be a great decision.

GH data by YCharts

1. Exact sciences

Some cancer diagnoses may have better results than others, especially if the disease is caught early. Any technology that allows us to do just that is likely to have some success. Helping lower healthcare costs while saving lives is not a bad business model. This is what Exact Sciences is doing with Cologuard, a non-invasive test for colorectal cancer, the second deadliest cancer in the United States When diagnosed in stages 1 or 2, the five-year survival rate of this disease is 90%, however, when diagnosed in stage 4, the five-year survival rate drops to 10%.

Cologuard meets this need and, with 227,000 tests ordered since its launch in 2014, it has contributed to the excellent revenue growth of Exact Sciences in recent years. In the fourth quarter of its fiscal 2020, which ended Dec.31, the company reported revenue of $ 466.3 million, an increase of 57.8% year-over-year. Exact Sciences’ screening revenue increased 9% year-over-year to $ 250 million, which it said was driven by Cologuard’s volume growth. Note that the company recorded $ 99 million in revenue from COVID testing in the fourth quarter, a segment in which it recorded no sales in 2019.

But Exact Sciences’ revenue growth predates the pandemic: The company’s quarterly revenue has climbed 416.5% year-over-year over the past three years.

What’s next for Exact Sciences? First, it still taps into Cologuard’s addressable market. According to the company, some 46 million Americans who are eligible for colorectal cancer screening have not yet had it. As more patients decide to get tested with its product, Exact Sciences’ revenue will continue to grow.

Exact Sciences is also working on a clinical trial for its multicancer liquid biopsy test. Shares of the company climbed around 26% on September 24 after presenting preliminary data from the test. Liquid biopsies are non-invasive tests that allow doctors to look for cancer cells from tumors in blood samples. The Exact Sciences test demonstrated a sensitivity of 86% (the proportion of people with the disease who return a positive test) and 95% specificity (the proportion of people without the disease who test negative) during the ‘test.

The types of cancers this test can help detect include lung, liver, and stomach, among others. This multicancer test could help the company unlock a multi-billion dollar opportunity. With this outlook, patient investors can enjoy huge returns with this health care security over the next five years and beyond.

2. Guardian health

Guardant Health’s best-known products, Guardant360 and GuardantOMNI, are liquid biopsy tests with many essential uses. Guardant360 helps healthcare professionals match cancer patients with the best treatment options. Meanwhile, GuardantOMNI helps pharmaceutical companies identify patients with the right profile for their clinical studies.

The benefits of these products include faster diagnoses, lower health costs, and better health outcomes. Guardant Health’s liquid biopsy tests have been successful in the market. Over the past three years, the company’s quarterly sales have grown at a tremendous rate.

GH revenue (quarterly) by YCharts

Guardant Health’s revenue growth in recent years is largely due to the success of Guardant360 and GuardantOMNI. In addition, the company has short and long term catalysts that investors can look forward to. First, Guardant360 sales are expected to continue to grow this year.

Guardant Health recently reported data from a study showing that this product did better than tissue biopsy in genomic profiling of advanced non-small cell lung cancer. Tissue biopsies are invasive surgical procedures performed to detect cancer.

Lung cancer is the leading cause of cancer death in the United States, and non-small cell lung cancer is the most common type of lung cancer. These results will help the Guardant360 make even more progress in its addressable market.

In addition, the company is currently developing two products, Lunar-1 and Lunar-2. The first is intended for the detection of residual and recurrent cancers. Lunar-2 will focus on the early detection of cancer. Guardant Health sees a $ 45 billion opportunity for these two products if current studies validate their effectiveness.

The data will take some time to enter, but patient investors would do well to monitor the progress of these programs. Thanks to these catalysts, Guardant Health looks like a great stock to buy and hold until 2021 and beyond.