In the healthcare sector, giants like Eli Lilly, Johnson & Johnson, and UnitedHealth often capture the majority of investors’ attention. However, beyond these industry leaders, there are many lesser-known healthcare stocks that equally deserve serious consideration. The following three biotech stocks—Krystal Biotech (KRYS), Madrigal Pharmaceuticals (MDGL), and Exelixis (EXEL)—though not mainstream players in the industry, are worth adding to your watchlist.
Krystal Biotech focuses on developing drugs for rare diseases. In 2023, the company’s gene therapy Vyjuvek received approval for the treatment of dystrophic epidermolysis bullosa (DEB). This is a genetic disorder that makes patients’ skin extremely fragile, causing damage and blisters even from minimal friction. Vyjuvek is the first FDA-approved therapy for this condition in the United States and has achieved significant commercial progress since its launch.
Vyjuvek is the only drug marketed by Krystal Biotech. Last year, the company reported revenue of $389.1 million, a year-over-year increase of 34%. The company achieved net profitability, with earnings per share rising 128% year-over-year to $6.84.
Krystal Biotech still has substantial growth potential within the DEB patient population, especially as the company has obtained marketing approval for Vyjuvek in other regions such as Europe and Japan. Additionally, the company has a robust pipeline of therapies targeting various other diseases. As long as it can continue to build on Vyjuvek’s strong momentum while making solid clinical and regulatory progress, its revenue, profits, and stock price are likely to keep moving in a positive direction.
Madrigal Pharmaceuticals also achieved a major breakthrough in 2024 when its drug Rezdiffra received FDA approval as the first treatment for metabolic dysfunction-associated steatohepatitis (MASH). Rezdiffra is currently under accelerated approval, meaning ongoing confirmatory clinical trials will assess its clinical benefit; if those trials fail, the drug could be withdrawn from the market.
However, this has not deterred doctors from prescribing Rezdiffra. In 2025, Madrigal Pharmaceuticals reported total revenue of $958.4 million, a year-over-year increase of 432%, driven entirely by its sole approved product, Rezdiffra. The market momentum for this therapy is understandable—MASH affects a large number of patients, estimated in the millions, and before Rezdiffra, there were no specific treatments available for the disease.
Beyond Rezdiffra, Madrigal Pharmaceuticals has multiple pipeline candidates focused on MASH, which could help expand its addressable market. As the company gains market share in this niche, its stock has the potential to deliver outstanding returns.
Exelixis is an oncology-focused company. Its most important drug, Cabometyx, is used to treat certain types of liver and kidney cancer. Cabometyx has received approval for multiple indications, including as part of combination therapy regimens, and it remains the most prescribed drug in its class for renal cell carcinoma. For years, Cabometyx has been the primary growth driver for Exelixis, a position it is expected to hold until generic competition emerges around the early 2030s.
By that time, Exelixis’s portfolio of approved drugs should have evolved. The company is developing multiple next-generation cancer therapies, one of which, called zanzalintinib, is being considered for approval as part of a combination therapy for colorectal cancer (CRC). CRC is the second leading cause of cancer death globally, representing a significant unmet medical need.
Exelixis also has multiple pipeline candidates expected to make progress over the next five years. The company has proven itself to be an innovator in oncology, a field typically dominated by large pharmaceutical companies. This, combined with Exelixis’s strong financial performance, makes its stock worthy of serious consideration.
In summary, while Krystal Biotech, Madrigal Pharmaceuticals, and Exelixis are not giants in the healthcare sector, each has achieved key drug approval breakthroughs in rare diseases, metabolic dysfunction-associated steatohepatitis, and oncology, respectively. They also possess clear growth trajectories and follow-on pipeline assets. For investors focused on niche biotech investment opportunities, these three stocks offer differentiated options compared to the industry’s major players.
