By stock_street_wire

Three Top Small Cap Biotech Stocks

Biotech stocks may be one of the most speculative sectors of the market, but with aging baby boomers creating a surging demand for better care and treatment options, new innovations, and multi-billion-dollar merger and acquisition potential, the sector is not only explosive, but one of the most profitable.

Sure, the sector can be plagued by long development lead times, and there is a high risk of failure, but once you find a good stock, the rewards can be significant.

Biotech stocks with major US FDA dates approaching can offer sizable opportunities, especially if their treatments show signs of success.

Here are three biotech stocks with major catalysts.

Biotech Stock No. 1 — Nabriva Therapeutics  (NBRV)

As we near June 30, 2019, we believe the stock could push significantly higher. That’s when the FDA will rule on its Contepo IV drug for the treatment of complicated urinary tract infections.  If approved, it will be a first-in-class intravenous (IV) antibiotic with broad spectrum activity against Gram-negative and Gram-positive organisms, including ESBL-producing Enterobacteriaceae and other multi-drug resistant organisms. Annually, some three million cases of cUTIs require hospital treatment in the U.S. for Gram-negative infections.

Biotech Stock No.2 — Tyme Technologies (TYME)

TYME is a clinical-stage biotechnology company, develops cancer metabolism-based therapies (CMBTs) in the United States. Its lead candidate is the SM-88, a CMBT that is in Phase II clinical trials to treat cancer, including pancreatic, lung, breast, prostate, and sarcoma cancers.  Even though TYME has a small market cap of $115 million, insider activity piqued our interest in recent days along with a sizable price target.

Over the last two weeks, insiders bought a total of 85,000 shares.

And while the chart hasn’t been impressive, an H.C. Wainwright Buy rating also piqued our interest. The firm noted that, “We maintain our Buy rating of TYME and our 12-month price target of $9.50 per share. We derive our price target based on a net present value analysis of projected SM-88 revenues through FY2030 assuming a 12% discount rate and 2% terminal growth rate. We derive an NPV of $1.5B for SM-88 and include $17M in net cash to arrive at a 12-month price target of $9.54 per diluted share, which we round to $9.50.”

Biotech Stock No. 3 – Adverum Biotechnologies (ADVM)

Adverum Biotechnologies (ADVM) is a clinical-stage gene therapy company that engages in developing gene therapy product candidates to treat ocular and rare diseases. Its pipeline of product candidates includes ADVM-022, an adeno-associated virus (AAV). 7m8-aflibercept for the treatment of wet age-related macular degeneration; ADVM-043, an investigational gene therapy candidate for the treatment of alpha-1 antitrypsin deficiency; and ADVM-053, a preclinical gene therapy product candidate for the treatment of hereditary angioedema.

The U.S. FDA just lifted its hold on the trials allowing dose escalation to 2 x 10^12 vg/eye. This dose would be three times higher than the dose of 6 x 10^11 vg/eye evaluated in the first cohort. However, based on the robust preliminary anatomical response observed to date in the first cohort (n=6), Adverum will begin dosing the second cohort at a lower dose of 2 x 10^11 vg/eye, three times lower than the dose used in the first cohort. The dosing of patients in this second cohort is expected to begin in June 2019. Adverum believes that ADVM-022 at a dose of 6 x 10^11 vg/eye has demonstrated the potential to provide sustained efficacy following a single intravitreal injection.

“The preliminary results from the first cohort of patients in the OPTIC trial are exciting. We look forward to presenting 24-week primary and secondary outcomes from this cohort of patients at a scientific meeting in the second half of this year,” said Leone Patterson, chief executive officer of Adverum. “We are pleased that the FDA and the DMC independently cleared us to dose escalate in the OPTIC trial. Given the encouraging robust anatomical response from patients in the first cohort, we will begin dosing patients in the second cohort at a lower dose of 2 x 10^11 vg/eye, instead of dose escalating as previously planned.”

Unfortunately, wet AMD is a leading cause of vision loss in patients over 60 years of age, with a prevalence of approximately 1.2 million individuals in the U.S. and 3 million worldwide. The incidence of new cases of wet AMD in the U.S. is approximately 150,000 to 200,000 annually, and this number is expected to grow significantly as the country’s population ages. 

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