When you think about biotech stocks, you likely think about those massive pharma companies that boast blockbuster drugs that are already on the market.
But consider the same biotech a decade ago before the blockbuster drugs and you’d find a company that was much smaller with several drug candidates in its pipeline.
These three clinical-stage biotech are all developing strong candidates that could become the future blockbuster treatments for sickle cell disease, RSV and influenza, and even mesothelioma and pancreatic cancer.
And each are expected to deliver huge returns over the next year. Here’s why you should consider these three small biotech stocks.
Global Blood Therapeutics (NASDAQ: GBT)
Global Blood Therapeutics (NASDAQ: GBT) is a small cap biotech that should be on your radar.
GBT has a market cap of $2 billion, and shares are up nearly 60% in the last year.
Last week, GBT announced a new exclusive global licensing deal with Swiss biotech giant Roche (OTC: RHHBY) for the rights to inclacumab. The company wants to develop the drug as a treatment for vase-occlusive crises (VOC) in patients with sickle cell disease (SCD), further bolstering GBT’s pipeline.
Oppenheimer analyst Mark Breidenbach praised the deal for inclacumab, saying “In our view, inclacumab could help fill a clinical benefit gap for patients receiving voxelotor, Global Blood’s lead product… We see inclacumab as a complementary and logical addition to Global Blood’s pipeline.”
The clinical-stage company also has a strong candidate in its pipeline with its GBT440 treatment. GBT440 is expected to find regulatory and commercial success in the treatment of sickle cell disease, and Breidenbach says it could “substantially improve the standard of care in this indication.”
The consensus price twelve-month target for GBT is $82.57, indicating possible upside of 82.28%. Late last month, the analyst at HC Wainwright set a price target for the stock of $125 – 178% higher than Thursday’s closing price.
Novavax (NASDAQ: NVAX)
Novavax (NASDAQ: NVAX) is a clinical-stage biotech trading under $2 with a very interesting pipeline.
The company’s most important drug candidate now is its vaccine for respiratory syncytial virus (RSV), ResVax. ResVax is currently in a phase 3 study for protecting infants from RSV through immunizing mothers. Last month, Novavax announced that it had reached a critical level of enrollment in the study, with at least 3,000 women receiving the ResVax vaccine.
The company also announced that the FDA had agreed to an accelerated approval path for its experimental nanoparticle-based flu vaccine, NanoFlu. NanoFlu is currently in a phase 2 study with results anticipated in Q1 2019, and if the results of that study are positive, phase 3 trials are likely to begin in the second half of the year.
But perhaps Novavax’s most interesting opportunity is a candidate that is still in preclinical testing. Novavax is working on a combination influenza and RSV vaccine, which market research firm EvaluatePharma says is its most promising vaccine in development right now. EvaluatePharma anticipates the combo vaccine could deliver sales in excess of $1.8 billion by 2024 if it is approved.
Analysts’ average twelve month price target for NVAX is $3.80, suggesting potential upside of 163.89%. The analyst at Seaport Global Securities recently upgraded the stock from a Neutral to a Buy with a price target of $5.00 – 247% above the price as of this writing.
Selecta Biosciences (NASDAQ: SELB)
Like Global Blood Therapeutics and Novavax, Selecta Biosciences (NASDAQ: SELB) is a clinical-stage biotech. It is focused on developing nanoparticle immunomodulatory drugs for the treatment and prevention of multiple diseases.
Its pipeline includes synthetic vaccine particles (SPV) enabled enzyme, oncology, and gene therapies, and its lead pipeline candidate, SEL-212, is in phase 2 trials to treat severe gout patients to resolve their symptoms, including flares and gouty arthritis.
Last year, SELB announced an experimental compound licensing deal with the National Cancer Institute (NCI). Selecta licensed its LMB-100 candidate, which is in phase 1 clinical trials for the treatment of patients with malignant pleural or peritoneal mesothelioma.
LMB-100 contains a toxin that binds to mesothelin, a protein expressed in several types of cancer. The company believes that the candidate can be combined with its proprietary Synthetic Vaccine Particle (SVP) technology to more effectively treat some cancer types, allowing patients to tolerate treatment for an extended period of time.
The Center for Cancer Research, part of the National Cancer Institute, is studying LMB-100’s impact in patients with mesothelioma and pancreatic cancer.
The average twelve-month price target for SELB is $34.33, or 152.64% higher than Thursday’s closing price. In July, Canaccord Genuity reiterated its Buy rating on the stock and set a price target of $40 – 194% higher than the current price.