If I had $5,000 to invest in ASX healthcare shares, I'd be looking for businesses with the potential to become considerably more valuable over time.
And there are two companies that I think deserve a closer look.
Both are developing treatments that could make a real difference to patients, and both have opportunities to grow over the coming years.
But would I buy their shares today? Here's my view.
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Cochlear Ltd (ASX: COH)
Cochlear has had a difficult time recently, but I remain confident about its long-term future.
The company is a global leader in hearing implants, helping people with severe hearing loss regain access to sound.
And despite its international success, there's still an enormous number of people who could benefit from its technology. Cochlear estimates that fewer than 5% of eligible adults in developed markets currently receive a cochlear implant.
I think that suggests the company could keep growing for many years simply by helping more people access treatments that are already available.
Of course, reaching those patients takes time. Many people are unaware that they could benefit from an implant, while others face delays in diagnosis and referrals.
That's why I like Cochlear's efforts to improve awareness and make it easier for patients to receive treatment.
The company is also continuing to invest in better technology. Its newer Nucleus Nexa implant has been well received, while work on a fully implantable hearing system could eventually make treatment even more convenient.
And there's some encouraging news on the earnings front. At Monday's annual general meeting, management reaffirmed its FY27 underlying net profit guidance of $330 million to $350 million, up from $322 million in FY26.
Although the recovery is expected to be gradual, I think Cochlear has the technology and market position to deliver much stronger earnings over the longer term.
For me, this is a business I'd be happy to buy today and hold for the next decade.
Mesoblast Ltd (ASX: MSB)
Mesoblast shares are a more complicated investment. After years of clinical trials, regulatory setbacks, and substantial spending, the biotechnology company has finally achieved something investors have long awaited.
It has a treatment generating meaningful commercial revenue. Its first approved product, Ryoncil, treats children with a serious complication of bone marrow transplants, in which the donor's immune cells attack the patient's body.
And the early sales figures have been encouraging. In the September quarter, Ryoncil generated US$28 million in revenue, an increase of 44% compared with a year earlier.
I think that's a significant achievement for a company that has spent so long working towards commercialisation. And there's an opportunity for the business to become much larger.
Mesoblast is seeking to expand Ryoncil into adult patients and has other treatments in development for conditions including chronic lower back pain and heart failure. Success with these programmes could transform its earnings potential.
But I'm still hesitant about buying the shares. Mesoblast reported a net loss of US$57.5 million in FY26, and it remains to be seen how quickly growing sales can translate into sustainable profits.
Further clinical trials and regulatory approvals will also be expensive, with no guarantee of success.
I can certainly see the potential for substantial returns if everything goes well. But I'd prefer to see more evidence that Mesoblast can build a consistently profitable business before investing.
For now, I would rate its shares as a hold.
Foolish takeaway
If I had $5,000 available to invest today, Cochlear shares would be my choice of the two.
I think the company's position in hearing healthcare gives it an excellent opportunity to grow over the next decade, especially as more patients gain access to treatment.
Mesoblast shares could also have a bright future, and I'll be interested to see how the company's commercial progress develops.
But I'm happy to be patient with this one. I'd rather see the company establish a stronger earnings record before deciding whether it deserves a place in my portfolio.
