In recent weeks, the Street has become much more enamored with pharma stocks than it was previously. The iShares Biotechnology ETF (NASDAQ:IBB) climbed 6% so far this year. As a result, those who invest in pharma stocks now will benefit from the sector’s current positive momentum.

But from my perspective, that’s just icing on the proverbial cake. The main reason to buy the shares of some pharma stocks is that the drugs that these firms have developed could eventually become huge blockbusters. And the stocks of the companies that accomplish that goal will produce huge returns.

I like to recommend and buy pharma stocks whose products have not yet become blockbusters but have excellent chances because their risk-reward ratios are excellent.

Revance (RVNC)

In September, the FDA approved Revance’s (NASDAQ:RVNC) anti-frown line injection, DAXXIFY.

Like Botox, the product is a neutrotoxin. However, DAXXIFY’s effects last about six months, while Botox’s impact only lasts for roughly 13 weeks or slightly over three months, This gives DAXXIFY a huge advantage.

Revance CEO Mark Foley reported on the company’s third-quarter earnings conference that there have been more than 1.1 billion hits on online articles regarding DAXXIFY in the roughly two since the treatment had been approved.

On Jan. 10, Revance reported preliminary fourth-quarter revenue of $10.5 million to $11.5 million from DAXXIFY. That’s a solid start, but of course it barely scratches the surface of the injection’s potential.

Likewise, the $2.73 billion market capitalization of RVNC stock is quite low and can easily soar 20 times if DAXXIFY become a blockbuster.

Shockwave Medical (SWAV)

Shockwave (NASDAQ:SWAV) has developed a shockwave treatment for cardiovascular calcium.

According to SWAV, competing products only treat superficial calcium and are unable to get rid of “deep calcium.” SWAV’s offering, IVL, emits shockwaves that do eliminate such calcium.

In the third quarter, SWAV’s revenue doubled year-over-year to $131 million. It generated a 92-cent earnings per share beating the average estimate of 68 cents. For all of 2022, SWAV reported that its revenue had jumped 106%-107% YOY.

In the last three months, SWAV stock has tumbled 30% amid worries over the company’s acquisition of Neovasc (NASDAQ:NVCN), which develops treatments for angina.

But I believe that the retreat of SWAV stock has created an excellent entry point for investors.

Immunocore (IMCR)

Immunocore (NASDAQ:IMCR) develops cancer treatments using its proprietary technology that drives the body’s killer T cells to tumors. So far, the company’s main drug, Kimmtrak, has only been approved by the FDA as a treatment for a melanoma of the eyes .

But encouragingly, last quarter, the company’s revenue from the treatment surged 25% versus the previous quarter to roughly $50 million. The sales growth, along with the FDA’s approval, validates the company’s technology and shows that it has tremendous potential.

In September, IMCR reported that, in a Phase 1 trial, the drug was “well tolerated and resulted in durable responses across multiple solid tumor types.”

IMCR’s market capitalization of just $2.92 billion far undervalues its tremendous potential. Indeed, I think that the stock could easily soar 20-50 times over the next three years.

On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.