Babe Ruth wasn't afraid to swing for the fences. That's how he became Major League Baseball's home run king for decades. If you're a Babe Ruth-style investor, you don't mind to swing for the fences sometimes, either.

Probably any investor would say that buying a stock that doubles in a year would certainly qualify as a home run. Few sectors provide as many opportunities for this kind of rapid increase as biotech. With this in mind, here are three biotech stocks that have a reasonable chance to double by next summer.

1. Amarin
Amarin's stock has dropped like a sinking fastball over the past year. Shares are down more than 60% since last summer and around 30% year-to-date. The steep decline stems largely from Amarin tackling commercialization of Vascepa on its own. At least at first glance, the odds that shares could double by next summer seem slim at best.


What looking at the stock's chart doesn't reveal, though, is that Amarin expects a huge decision by the Food and Drug Administration by Dec. 20. The FDA will determine whether the company's highly concentrated fish oil drug Vascepa can be marketed for treating patients with high triglyceride levels between 200 mg/dL and 499 mg/dL.

Amarin already won regulatory approval for selling Vascepa for super-high triglyceride levels of 500 mg/dL and above. However, the potential market size that would open up if the FDA grants approval in December is 10 times the size of the company's market available currently. The average analysts' price target for Amarin, according to Thomson/First Call, is $16.50 -- more than triple the stock's price now.

2. Achillion Pharmaceuticals
Achillion recently experienced a delay in the game that it had hoped to play. The FDA placed a clinical hold on hepatitis C drug sovaprevir after patients in a phase 1 drug-drug interaction study with the drug combined with ritonavir-boosted atazanavir were found to have elevated liver enzyme levels. Shares dropped 25% in one day as a result.

This delay doesn't mean that Achillion can't still emerge as a winner, though. There remains a distinct possibility that the elevated liver enzyme levels stemmed from the combination of the drugs, as opposed to being caused by sovaprevir itself. The issue hasn't been experienced with any other trials involving sovaprevir thus far.

If the safety concerns with the drug are ultimately found to be overblown, Achillion should bounce back in a major way. The company also has other hep-C drugs in development that present future catalysts. The median analysts' price target for Achillion is $12 per share. That's not quite double the current price, but it's not too far off.

3. Navidea Biopharmaceuticals
Some investors were likely befuddled by Navidea's stock action earlier this year. The company received FDA approval in March for Lymphoseek, its radiopharmaceutical agent used for imaging lymph nodes in patients with breast cancer or melanoma. That was great news, but shares dropped quickly and still haven't returned to previous levels.

This market reaction doesn't mean that Lymphoseek lacks solid potential. It does. The product should appeal to oncologists. Navidea has a tight relationship with Cardinal Health , which has exclusive U.S. distribution rights for Lymphoseek. Cardinal operates the largest nuclear pharmacy network in the nation with 140 pharmacies.

That market potential seems likely to expand in the relatively near future. Navidea submitted for European approval last December, which I expect the company will obtain. The company is also looking to expand use of the diagnostic agent to other forms of cancer, with a supplemental New Drug Application planned for later this year for use of Lymphoseek with head and neck cancer patients.

One-year price targets for Navidea go as high as $9 per share with an average target of $5. At the stock's current price, shares would need to rise somewhat higher than that average level to double. However, if the more optimistic analysts are right, doubling is doable.

Taking a swing
Do these three stocks truly have a shot at doubling by next summer? I think they do. However, know that events must unfold just right for it to happen for any of them. Negative regulatory decisions, unresolvable safety issues, and a whole host of other issues could result in any of these biotech stocks falling significantly within the next year rather than going up.

What's true in baseball is true in investing: The greater the possibility of reward, the greater the risk. After all, Babe Ruth wasn't just the home run leader. He was the strikeout leader, too. Swinging for the fences means you often swing and miss. But sometimes, it's worth taking a swing anyway.

Biotech presents plenty of home run opportunities, but the game of investing is won largely by consistently hitting plenty of singles. One great way to get those base hits is to find high-yielding stocks, The Motley Fool has compiled a special free report outlining our nine top dependable dividend-paying stocks. It's called "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can access your copy today at no cost! Just click here.

The article 3 Biotech Stocks That Could Double by Next Summer originally appeared on Fool.com.

Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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