Recent years have been volatile for ASX healthcare shares.
The past eight months have seen the S&P/ASX 200 Health Care Index (ASX: XHJ) swing 23% from peak to trough, then another 27% back the other way.
It seems the market can't decide whether the health sector is valuable as a defensive investment or the rapid rise in interest rates is harming future earnings.
But amid this to-ing and fro-ing, there have been some gems strong enough to keep swimming in one direction.
One of these is Clarity Pharmaceuticals Ltd (ASX: CU6).
'The most exciting company I've come across in Australia'
Clarity, which is developing treatments for prostate cancer, saw its shares languish at 41 cents in May 2022.
Let's imagine you bought $20,000 at that time.
Since then, the business has hit home run after home run, sending the market into a frenzy.
In fact, Frazis Capital portfolio manager Michael Frazis was full of praise for the biotech last month.
"This is the most exciting company I've come across in Australia lately," he said in an update to clients.
"Clarity has been steadily releasing data from patients treated with their copper therapies with late-stage prostate cancer."
On Thursday morning, the Clarity share price hit a new 52-week high of $2.87.
That $20,000 you invested only 21 months ago would now be worth a stunning $140,000.
That's a seven-bagger in less than two years, thank you very much.
The bulls are still bullish on this healthcare stock
As well as Clarity's own wins with favourable test results and regulatory approvals, there is a potential structural tailwind for prostate cancer therapies.
Currently, new treatments, such as the one Clarity is working on, are given only to "heavily pretreated patients" who have already had more traditional therapies applied to them.
But this could change, according to Frazis.
"The trend is towards increased monitoring and — where possible — fewer surgeries and hormone therapy, which involves the unwelcome side effects of incontinence, impotence, low testosterone and depression.
"The hope is that these targeted treatments, with their milder side effects, will move further up the treatment timeline, which could double or even triple industry revenues."
Admittedly this cultural change will take time, but Frazis reckons the shift is "looking more likely than ever today".
This is why, despite a 237% rocket in the share price over the past 12 months, many professionals are still bullish on Clarity.
Broking platform CMC Invest currently shows all three of Bell Potter, Jefferies, and Wilsons rating the healthcare stock as a buy.
