Cramer: Major Profit Potential in 2 Diagnostics

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For the past 2 weeks, Jim Cramer has been profiling different companies involved in a wide range of treatments for some of the worst diseases known to mankind.

Although these stocks are highly speculative, if in fact, the companies develop successful treatments or cures, the profit potential could be enormous.

"In a growth starved world, these kinds of stocks make a ton of sense," Cramer said. "As long as these biotech and biopharma companies are innovating and developing superior pipelines growth in the out-years can be tremendous, and tremendous earnings growth leads to higher stock prices."

To conclude this series, Cramer focused on diagnostics.


Cramer said one of the diagnostic breakthroughs developed by Opko involves the protocol for men diagnosed with prostate cancer. The current tests aren't always accurate, yet if they come back positive, patients must undergo a painful and sometimes unnecessary prostate biopsy that costs $2,000.

"In this country, we perform 1.2 million prostate biopsies a year, and it's possible that 750,000 of them might not be necessary," said Cramer.

Opko, however, has developed a new kind of test, one which uses additional markers and may be significantly more accurate than the current standard. The test is already used in Europe and could launch in the US as soon as this quarter.

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In addition, Cramer sees other tailwinds.

He said the company has a pipeline of rapid fire diagnostic tests that it's developing for diseases ranging from lung cancer and pancreatic cancer to tuberculosis and more.

On top of that Cramer said Opko has a robust drug business, which includes a partnership with Tesaro on a drug that helps suppress nausea in chemotherapy patients.

"In addition they have a number of early stage drug candidates further down the pipeline, including one for Parkinson's," Cramer said.

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Exact Sciences

Exact Sciences is largely a bet on a new protocol for colon cancer screening.

"Currently doctors order colonoscopies for people over 50. It's a painful, invasive procedure," Cramer said.

Exact Sciences has developed a test that might allow many people to avoid a colonoscopy if they don't really need it. The Exact Sciences test involves a stool sample and nothing more. Only if this patients test positive would they subsequently undergo a colonoscopy.

"This test could potentially generate $500 million to a billion in peak sales," said Cramer. "It doesn't go up for FDA approval until 2014 so Exact Sciences is risky, but if all goes right then this $635 million company could l be worth a heck of a lot more." (Read More: One Word for This Stock - Poop!)

Call Cramer: 1-800-743-CNBC

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