3 Stocks That Could Be Monster Winners in 2024

 Three Motley Fool contributors think they've identified stocks that could be monster winners in 2024. Here's why they picked CRISPR Therapeutics (NASDAQ: CRSP), Madrigal Pharmaceuticals (NASDAQ: MDGL), and Verona Pharma (NASDAQ: VRNA).

It pays to be an innovator

Prosper Junior Bakiny (CRISPR Therapeutics): It's been a great year for the field of gene editing. Several companies that specialize in this area have made important progress. However, the most significant milestone arguably came from CRISPR Therapeutics, which, together with its partner Vertex Pharmaceuticals, earned approval for Casgevy.

This treatment for sickle cell disease and beta-thalassemia (two rare blood diseases) is the first gene-editing therapy on the market that uses the CRISPR technique, which earned its pioneers a Nobel Prize in chemistry. While CRISPR Therapeutics' shares haven't performed particularly well since Casgevy's U.S. approval in early December, next year could be different.

CRISPR Therapeutics and Vertex are now launching this medicine. With a price tag of $2.2 million in the U.S., its boasts massive, multibillion-dollar potential.

It won't happen overnight, though. Gene-editing treatments are challenging to administer, and the process takes some time. However, the two partners will use the next 12 months to set a solid foundation for Casgevy's long-term success.

The exercise will include getting third-party payers on board -- something Vertex Pharmaceuticals has plenty of experience with -- and activating authorized treatment centers where the medicine can be safely and effectively administered. In the meantime, CRISPR Therapeutics will make progress on other CRISPR-based gene-editing treatments.

With the approval of Casgevy, the company's work no longer looks hypothetical. The rest of CRISPR Therapeutics' lineup uses the same CRISPR gene-editing technique with which Casgevy was developed. For all those reasons, CRISPR Therapeutics could be a major winner in 2024 -- and beyond.

Rebound that could soon gain momentum

Keith Speights (Madrigal Pharmaceuticals): With a market cap hovering around $4.7 billion, Madrigal Pharmaceuticals isn't a monster stock right now. The company's shares fell by a double-digit percentage in 2023 while the overall stock market soared. However, this biotech stock began to bounce back in late October, and I think this rebound could soon gain momentum.

I'm not the only one who's bullish about Madrigal. The consensus 12-month price target for the stock reflects an upside potential of over 30%. All three of the analysts surveyed by LSEG in December who cover Madrigal rated the stock as a buy.

There's a simple reason behind this optimism. Madrigal hopes to win U.S. Food and Drug Administration (FDA) approval for resmetirom in treating nonalcoholic steatohepatitis (NASH) by March 14, 2024. The clinical data for the drug looks solid. Importantly, there are currently no FDA-approved therapies for treating NASH, which has quickly become the top cause of liver transplants in the U.S.

Madrigal appears to be in a good financial position to fund the potential commercial launch of resmetirom. The company raised $500 million via a public stock offering in October.

SVB Financial Group analysts think that resmetirom can generate peak annual sales of around $2.5 billion. Jefferies Financial Group projects even higher peak sales of $3 billion. Whatever the actual amount is, Madrigal could soon begin to rake in significant revenue.

I look for new CEO Bill Sibold to channel some of its newfound riches into expanding the pipeline. Sibold's experience at Sanofi should give him a good foundation to lead Madrigal in its next stage of growth.

Small-cap with a significant runway

David Jagielski (Verona Pharma): One stock with tremendous potential heading into 2024 is Verona Pharma. It's a risky business to invest in as it doesn't have an approved product, revenue is inconsistent, and it has incurred net losses of just under $51 million over the trailing 12 months.

But Verona's financials and its prospects could soon get a big upgrade. That's because the company has a promising treatment in its pipeline for chronic obstructive pulmonary disease, or COPD. Ensifentrine is an investigational drug that has demonstrated safety and efficacy in phase 3 trials, showing improvements in lung functions.

There are an estimated 380 million patients with COPD, which is the third-leading cause of death worldwide. While there are treatments available in the market, many patients are dissatisfied with the current options, and the majority continue to have symptoms even when they're receiving treatments. Ensifentrine gives patients a new alternative and has scored well in reducing symptoms for patients and improving their quality of life.

The FDA is reviewing the drug, with a PDUFA date set for June 26, 2024. If ensifentrine obtains approval, it would be a huge win for Verona. The drug could generate close to $1.5 billion in annual revenue by 2033. Approval could be a game changer for Verona, as it would give it a source of consistent revenue.

If you're willing to take a chance on this small biotech stock, the gains could be massive next year. The consensus price target is just under $33, implying a potential upside of close to 60% for investors who buy now. It's admittedly risky, but Verona offers an incredibly promising upside.

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