3 Under-the-Radar Healthcare Stocks Worth Adding to Your Watchlist

The article highlights three biotech names with strong recent momentum: Krystal Biotech generated $389.1 million of 2024 revenue, up 34% year over year, and $6.84 in EPS, up 128%; Madrigal reported 2025 revenue of $958.4 million, up 432%, with 36,250 patients on Rezdiffra; and Exelixis continues to benefit from Cabometyx while advancing zanzalintinib. The piece is broadly constructive on all three companies, emphasizing approved products, expanding indications, and pipeline optionality. It is primarily an analyst-style watchlist article rather than a new company-specific catalyst, so likely market impact is limited.

Analysis

The common setup across KRYS, MDGL, and EXEL is not just “good pipeline news,” but a re-rating from single-asset skepticism to platform durability. In each case, the market is forced to price a longer cash-flow runway than is typical for a biotech with one commercial driver, which matters because the multiple expansion can outlast near-term EPS beats. The second-order winner is the capital-light specialty pharma model itself: each successful launch de-risks follow-on indications and increases partnerability, which can pull in strategic buyers if broader markets stay risk-on.

The biggest underappreciated risk is not clinical failure in the next quarter; it is execution against scale. For KRYS and MDGL, commercial uptake can look strong early because niche specialists adopt first, but that creates a tougher second phase where growth depends on moving beyond the easiest prescribers into broader referral networks and payer discipline. If reimbursement tightens or confirmatory data create any ambiguity, these names can re-rate fast because the market is capitalizing future indication breadth rather than current revenue alone.

EXEL is the cleaner quality trade, but also the one with the most hidden “patience tax.” Cabometyx still funds the story, yet investors are effectively underwriting a late-cycle transition where pipeline assets must show enough probability-adjusted value before generic pressure becomes visible. The contrarian point is that the market may be over-celebrating today’s visible momentum and underpricing how much of the upside is already tied to continued label expansion, rather than outright penetration gains.

Net: this is a favorable tape for innovation-heavy biotech, but the better trades are those with asymmetric catalysts over the next 6-18 months rather than blind long exposure to the basket.

Key Decisions for Investors

• Long KRYS on pullbacks for a 6-12 month horizon; best risk/reward is around support after any post-earnings digestion, with upside driven by ex-U.S. expansion and pipeline optionality. Stop if commercial growth decelerates materially for two consecutive quarters.
• Long MDGL but size smaller than KRYS; use a 3-6 month catalyst window into confirmatory-trial readouts and payer-access updates. High upside if adoption broadens, but keep it as a smaller position because accelerated-approval risk can compress multiples quickly.
• Long EXEL as the highest-quality, lower-beta name in the group; favor a staged entry and hold 12+ months. The trade works if the market starts discounting post-Cabometyx durability before the patent cliff becomes a headline issue.
• Pair trade: long EXEL / short a broader high-beta biotech basket if risk appetite weakens. EXEL’s cash generation and less binary profile should outperform if the market shifts from story stocks to durable earnings.
• Avoid chasing all three after a strong run; instead, use call spreads on KRYS or MDGL to define downside into the next data window, since implied volatility likely understates the gap risk from any regulatory or clinical surprise.