Health and Medical

Investing in Microcap Biotech Stocks

Investing in microcap biotech stocks is one of the easiest ways to gain exposure to promising new biotech technologies. There are dozens of companies that have been able to turn promising drugs into marketable products. Here is a look at some of these companies.

Aerovate Therapeutics

AVTE, or Aerovate Therapeutics, is a small biotech company focused on therapies for rare cardiopulmonary diseases. It has a novel AV-101 dry powder inhaled imatinib for pulmonary arterial hypertension and plans to launch its first Phase 2 trial for the disease in mid-2023.

The company is also developing a second-generation candidate that has half-life extension technology. The company is also the 10th Massachusetts based biotech to have an IPO this year.

The company’s $72.6 million Series A round was led by Sofinnova Investments, with participation from Atlas Venture, Cormorant Asset Management, and Surveyor Capital. The company also reportedly raised $121.5 million in its IPO. The company has sold 8.7 million shares. The biotech reportedly has 145 institutional owners, including AOFAX – Alger Small Cap Focus Fund Class A, and Baker Bros. Advisors Lp.

The company’s IMPAHCT trial is designed to test the safety and efficacy of AV-101. It is also the largest clinical trial of its kind to date. The company plans to file an IND for the drug in the fourth quarter of 2021. Its aforementioned one-year-old AV-101 has a half-life of 1.2 months. The company has also made some other important announcements. Its newly acquired CEO is Timothy Noyes, who previously served as CEO of Genzyme and Proteon Therapeutics.

Aerovate is a small biotech company, but that doesn’t mean that it can’t be profitable. As an example, a recent restructuring plan aims to reduce cash burn. The company is also one of the largest recipients of grants and awards in the industry, making it an attractive prospect for investors.

The company also has a big bet on a new drug candidate that uses a proprietary toll-like receptor 9 agonist adjuvant to combat the disease.

Exelixis

Investing in microcap biotech stocks can be a risky proposition. However, it has been worthwhile in recent years. Exelixis is one such company. It is a genomics-based company focused on oncology treatments. Its products are sold under the Cometriq brand.

Exelixis has a market cap of $4.8 billion. It has $1.6 billion in cash on its balance sheet. Its cash position is more than 20% of the company’s market cap. The company will spend around $875 million on R&D this year.

Exelixis is currently focusing on early-stage cancer therapies. Its flagship drug is Cabometyx. Cabometyx is a renal cell carcinoma treatment that has been key to Exelixis revenue growth. However, the cancer drug could face several headwinds in the coming years.

Exelixis announced a large equity offering in early August. The company will use the proceeds to advance its drug pipeline. Among the drugs on the pipeline is XL092, a next-generation oral TKI targeting TAM kinases. The drug is in phase 1 clinical development. The drug is expected to enter pivotal studies in the future. It is also a potential treatment for metastatic colorectal cancer.

Exelixis shares are selling at around nine times forward earnings. However, they could reach a higher price if quarterly sales expand quickly. It also has a healthy balance sheet. Exelixis had more than $200 million in cash at the end of the first quarter.

Exelixis is also focusing on diversifying its product line. It is working on three Aurigene-led drug discovery programs. The company expects to begin clinical trials of Cabometyx in liver cancer patients next year. The company is also evaluating XL092 for metastatic colorectal cancer. Its XL092 drug is targeting VEGF receptors, TAM kinases, and MET. These kinases are implicated in cancer growth.

Medicenna

Medicenna is one of the more underperforming stocks on the Toronto Stock Exchange. The company’s primary business is the development of engineered interleukins, also known as superkines, which are capable of boosting the immune system or inspiring hope in patients with otherwise hopeless circumstances. The company has a hefty pipeline comprising of candidates for cancer immunotherapies, solid tumors and autoimmune diseases.

Medicenna is a microcap biotech stock in the context of its industry. It has a market cap of 69,637,469 dollars. Its most impressive asset is its patent portfolio, which includes its novel, novel interleukins, which are conjugated to IL-4, a cytokine, and are capable of a number of feats including killing cancer cells. In fact, its IL-4 based drug has shown some promise in Phase II trials.

Medicenna’s IL-4 conjugated drug also boasts the aforementioned “Tinker to Tighten” program, which is a cleverly worded and patented system that helps ensure a patient’s immune system can effectively mount a response to a given chemotherapy regimen. The most important function of this program is to ensure that patients are not overloaded by a high dose of a particular chemotherapy drug, thus, reducing overall cost. The company is currently engaged in a number of other initiatives, such as developing a vaccine for melanoma and testing IL-4 in the treatment of prostate cancer.

The company’s other major accomplishments include its superkines, such as MDNA32, which are capable of boosting the immune function and showing promise in the treatment of solid tumors and autoimmune diseases. The company has a number of other interesting products in the pipeline, including MDNA55, which is an IL-4 based drug for recurrent glioblastoma multiforme (brain cancer) and MDNA132, which is an IL-4 based product for the treatment of solid tumors.

Cassava

Despite the challenges, Cassava microcap biotech stocks have been performing well this year. The company’s flagship drug candidate, simufilam, is in Phase 2b clinical trials for the treatment of Alzheimer’s disease.

The drug, which is based on an entirely different protein, could be a game changer. It has the potential to treat Alzheimer’s disease, and that could mean billions of dollars in revenue. However, Cassava is years away from getting approval.

However, the stock has been trading higher for the past few days. This is in spite of reports that the Securities and Exchange Commission is investigating the company. Despite the investigation, Cassava says it has not received any updates from the SEC.

While the company’s progress looks bright, investors are still worried about data manipulation. The company has been accused of deceiving investors about the effectiveness of its drug. The drug is based on a forged scientific research.

Cassava’s main clinical research site is co-owned by a former crack addict and stripper. The former employee is a convicted felon.

Cassava has also received endorsements from the NIH. However, the company’s management has been accused of manipulating data. The company has refocused its research on neurodegenerative diseases. The company hopes to begin Phase 3 trials by late 2021.

The company is also years away from obtaining FDA approval. However, the company’s management says it is optimistic.

Cassava’s shares are still above their 50-day moving average. This is in spite of the company’s recent loss in the third quarter.

The company has a market cap of nearly $2 billion. However, the company has not made any active collaborations with big-pharma leaders. This could pose a threat to the stock’s long-term performance.

Novavax

Despite a lack of commercial product, Novavax is a microcap biotech stock that could become a global player in the development of vaccines to fight infectious diseases. The company produces immunogenic nanoparticles using recombinant technology. Several supply agreements around the world give Novavax access to the products it needs.

Novavax is currently working on a vaccine for respiratory syncytial virus and a flu vaccine, both of which are in clinical trials. The company has also received funding from the U.S. Department of Health and Human Services and the Bill & Melinda Gates Foundation.

Novavax is also working on a protein-based coronavirus vaccine that is slated to generate broadly cross-reacting antibodies. This vaccine should be ready for testing in the coming weeks.

Novavax is also developing an influenza vaccine for seniors. It’s called NanoFlu and it’s been shown to be more effective than the top flu vaccine on the market. NanoFlu should be approved in the near future.

The company also recently announced that it had signed a major manufacturing contract with Catalent. The contract is for the production of up to 100 million doses of Novavax’s vaccines. The company has also received funding from the Coalition for Epidemic Preparedness Innovations, a charity started by Bill Gates.

Novavax’s COVID-19 vaccine is currently awaiting FDA approval and is expected to become a blockbuster drug. The company has already received about $1 billion in pre-orders for the vaccine. However, the company has had to delay U.S. trials twice because of production issues. Novavax also plans to launch the vaccine in other countries, including Mexico and the U.K. This month, large-scale phase 3 trials are expected to begin in the U.S.

Lokesh Goyal

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