Clinical-stage biopharmaceutical companies Karuna Therapeutics (NASDAQ: KRTX) and Reata Pharmaceuticals (NASDAQ: RETA) are up more than 64% and 17% so far this year thanks to potential blockbuster drugs.

Karuna's lead candidate, KarXT, has excited investors because it is a potentially new way to treat schizophrenia as well as psychosis in Alzheimer's disease, while Reata's Omaveloxolone has the potential to be the first approved therapy to treat Friedrich's ataxia, a rare genetic neurodegenerative disease. Reata also has a therapy in late-stage trials, Bardoxolone Methyl, that is showing promise to treat chronic kidney disease (CKD) caused by various conditions.

Both companies are awaiting word as to whether their drugs will be approved by the Food and Drug Administration, based on positive phase 3 trials.

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Source Fool.com