Some of the most impressive stock gains over the past 20 years have come from one tiny corner of a single industry.
That’s because the potential associated with “breakthroughs” in this tiny corner is about more than just profits – in many cases, it’s about saving lives.
The biotechnology sector is one that can deliver fortune-making value for investors in a relatively short period of time.
Many investors are well aware of the high upside potential in biotech… and like to maintain exposure to the sector by investing in large pharmaceutical companies or biotech ETFs.
That can be a successful strategy for those looking for smaller, more consistent returns.
But the “tiny corner” of the biotech sector that offers the most significant upside potential – including opportunities for life-altering returns in some cases – is with smaller biotech companies.
Those companies working toward developing much-needed breakthroughs to fight some of our most devastating medical issues can see sharp spikes in shareholder value upon news of a potential breakthrough or acquisition by a larger company.
What follows is a list of 4 small biotech stocks that right now offer that type of blockbuster potential thanks to the breakthroughs they’re working so hard to develop. As always, be sure to do your own due diligence before investing in any stock to make sure it’s right for your financial situation and that it is consistent with your acceptable level of risk.
1. Aerovate Therapeutics, Inc. (Nasdaq: AVTE)
Aerovate Therapeutics, Inc. (Nasdaq: AVTE) is a clinical-stage biotech company that focuses on developing drugs that meaningfully improve the lives of patients with rare cardiopulmonary disease.
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In November 2022, the company announced the the publication of Phase 1 study results evaluating AV-101, a novel dry powder inhaled formulation of imatinib, in ERJ Open Research.
The results showed that AV-101 was generally well tolerated and inhaled administration significantly reduced systemic exposure compared to orally dosed imatinib with no serious adverse events reported.
AV-101 is being developed to address abnormal cellular proliferation and resistance to apoptosis in the pulmonary vasculature, which are key features of the pathophysiology of pulmonary arterial hypertension (PAH).
Dr. Hunter Gillies, M.B.Ch.B., Chief Medical Officer at Aerovate, said, “Our objective was direct delivery of imatinib to the lung using lower doses to limit systemic exposure, and our Phase 1 findings demonstrate that inhaled AV-101 limited systemic exposure compared to oral imatinib and was generally well tolerated. There continues to be a high unmet need for new medications to treat PAH, and these results reaffirm our confidence in AV-101 as a potential option for people living with the condition. We look forward to further investigation of AV-101 in our Phase 2b/Phase 3 trial.”
2. Iteos Therapeutics, Inc. (Nasdaq: ITOS)
Iteos Therapeutics, Inc. (Nasdaq: ITOS), a clinical-stage biopharmaceutical company, engages in the discovery and development of immuno-oncology therapeutics for patients.
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iTeos Therapeutics leverages its deep understanding of tumor immunology and immunosuppressive pathways to design novel product candidates with the potential to fully restore the immune response against cancer.
The company’s innovative pipeline includes two clinical-stage programs targeting novel, validated immuno-oncology pathways designed with optimized pharmacologic properties for improved clinical outcomes. The first antibody product candidate, EOS-448, is a high affinity, potent, anti-TIGIT antibody with a functional Fc domain, designed to enhance the anti-tumor response through a multifaceted immune modulatory mechanism, currently progressing in multiple indications in collaboration with GSK.
The company is also advancing inupadenant, a next-generation adenosine A2A receptor antagonist tailored to overcome cancer immunosuppression into proof-of concept trials in several indications following encouraging single-agent activity in Phase 1.
3. Repare Therapeutics, Inc. (Nasdaq: RPTX)
Repare Therapeutics, Inc. (Nasdaq: RPTX) is a leading clinical-stage precision oncology company enabled by its proprietary synthetic lethality approach to the discovery and development of novel therapeutics.
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The company utilizes its genome-wide, CRISPR-enabled SNIPRx® platform to systematically discover and develop highly targeted cancer therapies focused on genomic instability, including DNA damage repair.
The company’s pipeline includes RP-6306, a PKMYT1 inhibitor currently in Phase 1 clinical development; camonsertib (also known as RP-3500), a potential leading ATR inhibitor currently in Phase 1/2 clinical development partnered with Roche; RP-2119, a Polθ inhibitor program in ongoing IND-enabling studies; as well as several additional, undisclosed preclinical programs.
Just recently – in November 2022 – industry analysts delivered a significant upgrade to their estimates for the company, with a view that Repare Therapeutics will make substantially more sales than previously expected.
This upgrade comes on the heels of the company’s quarterly earnings announcement of revenues of $112.55 million for the quarter ended September 2022 and earnings of $1.71 per share, both of which were significantly ahead of consensus estimates.
4. 89bio, Inc. (Nasdaq: ETNB)
89bio, Inc. (Nasdaq: ETNB) is a clinical-stage biopharmaceutical company dedicated to the development of best-in-class therapies for patients with liver and cardiometabolic diseases who lack optimal treatment options.
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The company is focused on rapidly advancing its lead candidate, pegozafermin, through clinical development for the treatment of non-alcoholic steatohepatitis (NASH) and severe hypertriglyceridemia (SHTG).
Pegozafermin is a specifically engineered, potentially best-in-class fibroblast growth factor 21 (FGF21) analog with unique glycoPEGylated technology that optimizes biological activity through an extended half-life.
The company has announced that it has completed enrollment in the Phase 2b ENLIVEN trial of pegozafermin against NASH , and expects to release top line data during 1Q23.
Cantor Fitzgerald analyst Kristen Kluska recently wrote, “We believe ETNB has one of the strongest near-term inflection opportunities in our coverage universe, despite a recent strong run up. We are making 89bio a top pick into the 1Q23-guided Phase 2b ENLIVEN data for pegozafermin (PGZ; glycoPEGylated FGF21 analog) in non-alcoholic steatohepatitis (NASH).”