(FORTUNE Magazine) – Cancer's Waterloo is, alas, not at hand. Thirty years and billions of research dollars after Congress officially declared war on cancer by passing the National Cancer Act (opening the door for a radical increase in federal funding to fight it), "cancer"--a catch-all term that includes 100 distinct illnesses--remains the second leading killer of Americans in terms of disease. But increased understanding of the genetic process is allowing scientists to develop custom treatments that promise not only to fight the disease more effectively but to cause fewer side effects. With some 400 new cancer medicines in development, close to half of which are in late-stage FDA approval trials, medical research appears ready to provide some radical breakthroughs--and exciting investment opportunities--in the next few years.

One company that looks poised to ride the wave is Swiss pharma giant Novartis (NVS, $35). Recently the company made headlines when the FDA approved Gleevec--a medicine that fights a form of blood cancer called chronic myelogenous leukemia--less than three months after Novartis filed for fast-track approval, the quickest clearance for a cancer therapy ever granted. Gleevec works by attaching itself to the abnormal proteins that signal the cancerous cells to divide and shutting down the process. It's a perfect example of the new type of medicines that could be on the way for cancer patients. Even the director of the National Cancer Institute has been unflinching in his enthusiasm: "This new drug, we believe, is the picture of the future of cancer treatment," Dr. Richard Klausner announced at a May press conference. Novartis' salesmen will also be pushing another promising cancer drug when they make their physician calls--Femara, which is used to treat breast cancer.

Like other large pharmaceutical companies, however, the company's fortunes depend on a whole catalog of drugs. When the FDA reversed course in June and failed to approve Novartis' Zelnorm, a drug designed to treat irritable bowel syndrome, the company's stock began to slide. It's now down 20% from its high at the beginning of the year. Some pros, however, believe that the dip has created a good buying opportunity--especially considering that Novartis will have far less exposure to negative industry trends over the next few years than many of its big-pharma peers (see previous story). Says Paul Abel, manager of the Kinetics Medical Fund: "At the moment, I think it's the finest buy on the Street."