It's been a bruising year for CSL Ltd (ASX: CSL) shares.
The healthcare giant has lost more than 50% of its value over the past 12 months, a remarkable fall for what was once considered one of the ASX's safest long-term investments.
For years, CSL earned its reputation as a reliable compounder, consistently delivering earnings growth and rewarding patient investors. Lately, however, profit downgrades and operational headwinds have replaced that steady momentum.
Investors looking for stronger growth may want to cast their eyes further down the healthcare sector.
Here are two ASX biotech stocks that analysts believe have the potential to double over the next 12 months.
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Mesoblast Ltd (ASX: MSB)
Mesoblast has entered an exciting new phase. The biotechnology company recently launched its first commercial product, Ryoncil, giving it a genuine opportunity to begin generating meaningful product revenue rather than relying primarily on funding and development milestones.
If Ryoncil sales continue to build, investors could eventually see the company transition towards sustainable earnings and positive cash flow — a significant milestone for any biotech business.
And Ryoncil isn't the whole story. Mesoblast also has a pipeline targeting major markets including heart failure and chronic lower back pain. Positive clinical or regulatory outcomes in either indication could dramatically increase the company's addressable market.
Of course, biotechnology investing always carries elevated risk, as investors in CSL shares could tell you. Clinical setbacks, regulatory delays, or weaker-than-expected commercial uptake can quickly change investor sentiment.
Even so, broker confidence remains exceptionally strong. According to TradingView data, all six analysts covering Mesoblast currently rate the shares a strong buy.
The average price target is $4.18, implying approximately 114% upside from current levels. The most bullish analyst values the shares at $5.06, representing potential upside of around 160%.
Telix Pharmaceuticals Ltd (ASX: TLX)
Telix has quietly become one of the ASX's most exciting healthcare growth stories. The company develops radiopharmaceuticals that help diagnose and treat cancer, operating in one of the fastest-growing areas of modern medicine.
Its biggest competitive advantage lies in the complexity of its business. Developing radiopharmaceuticals requires specialist manufacturing, regulatory approvals, supply chains, and technical expertise that are both difficult and expensive to replicate. Those barriers provide Telix with a meaningful competitive moat.
The company has also delivered a string of positive developments this year. Its recovery gathered pace after confirming a key European regulatory filing. Momentum accelerated further when the US Food and Drug Administration accepted its New Drug Application for TLX101-Px (Pixclara®).
Telix also announced a collaboration with Regeneron Pharmaceuticals, further strengthening confidence in its long-term growth prospects.
Analysts remain firmly in the corner of the $5 billion competitor of CSL shares. TradingView data shows most brokers rate the stock a strong buy. The highest price target stands at $32.19, implying approximately 100% upside.
Meanwhile, Morgans has a $24.33 target price, representing potential upside of around 50%, and recently highlighted that increasing consolidation across the healthcare sector could attract additional interest in Telix.
Foolish takeaway
Neither Mesoblast nor Telix are without risk. Both operate in industries where regulatory decisions, clinical trial results, and commercial execution can dramatically influence valuations.
However, unlike CSL shares, these companies are earlier in their growth journeys. With multiple potential catalysts ahead and analysts forecasting substantial upside, they could offer investors the kind of explosive returns that are increasingly difficult to find among the ASX's larger healthcare names.
