Iovance Biotherapeutics (IOVA -1.52%) and CRISPR Therapeutics (CRSP -1.27%) are two incredibly innovative biotechs, but this hasn't translated into strong performances recently. Both stocks have significantly lagged the market over the past three years due to a combination of factors.

However, these groundbreaking companies are still looking at meaningful opportunities and catalysts that could help turn things around in the long run -- and perhaps even deliver life-changing returns. Here's why Iovance Biotherapeutics and CRISPR Therapeutics are worth serious consideration by risk-averse investors.

1. Iovance Biotherapeutics

Iovance Biotherapeutics is a cancer specialist. Last year, it earned approval for Amtagvi, a medicine for advanced melanoma that's indicated for patients who have unsuccessfully undergone anti-PD-1 therapy. Amtagvi, a treatment made from cancer-fighting cells called tumor-infiltrating lymphocytes (TILs) in each patient's body, became the first of its kind to earn approval for treating a solid tumor.

Considering there's a significant unmet need in advanced melanoma, the medicine is already a hit. Last year, Iovance's revenue was $164.1 million; it had barely generated any the year prior. There's more where that came from as Amtagvi's uptake continues.

Why, then, is the stock underperforming? First, small biotech stocks often skyrocket after impressive clinical progress. Once they have products on the market, some of these medicines' success is already baked into their share prices, often leading to a sell-off. Second, Iovance's TIL therapies are complex to administer -- it takes 34 days to manufacture Amtagvi, a factor that limits the treatment's potential.

Still, at less than $4 per share, Iovance Biotherapeutics might be a steal. The company is seeking regulatory approval for Amtagvi in other countries. Meanwhile, the medicine will seek plenty of label expansions across various potentially lucrative indications. Amtagvi is undergoing a dozen clinical studies; if many of these pan out while it expands its market for Amtagvi without a hitch, Iovance's shares might soar.

On the flip side, a lot could go wrong. Significant clinical or regulatory setbacks would sink Iovance's share price. The stock is not for risk-averse investors.

However, for those comfortable with some volatility, initiating a small position in Iovance Biotherapeutics might be worth it, considering the stock's upside potential.

2. CRISPR Therapeutics

As its name suggests, CRISPR Therapeutics develops gene-editing medicines using the famed CRISPR/Cas9 technique, which earned its discoverers a Nobel Prize in Chemistry. In 2023, CRISPR Therapeutics' Casgevy became the first approved CRISPR medicine. The therapy, developed by the biotech in collaboration with Vertex Pharmaceuticals, treats a pair of rare blood disorders.

However, CRISPR Therapeutics has not yet generated much revenue, more than a year after its first approval. Manufacturing ex vivo gene-editing therapies is a complex, time-consuming process. In the meantime, many shareholders withdrew their money from this biotech company to invest in others that generate consistent revenue and earnings.

Still, the stock could be a worthwhile investment. Though Casgevy is taking time to take off, once it does, it will almost certainly exceed blockbuster status. The medicine costs $2.2 million in the U.S., while CRISPR Therapeutics and Vertex estimate a target market of around 58,000 patients, with very little competition. Elsewhere, CRISPR Therapeutics could make significant clinical progress, as it did with Casgevy years ago.

Since its 2016 initial public offering (IPO), CRISPR Therapeutics has delivered returns somewhat comparable to those of the broader market:

CRSP Total Return Level data by YCharts.

Once it reached -- or got close to reaching -- its first significant milestone, long-term investors cashed out. But those who get in now and hold for the long term could still be rewarded, as more breakthroughs may allow the stock to return to the highs it reached in 2021. The company's investigational gene-editing products, ranging from potential medicines for B-cell malignancies to possibly functional cures for type 1 diabetes, look promising.

CRISPR Therapeutics also isn't for risk-off investors, but others could earn significant returns by opening positions today and being patient.