While the COVID-19 pandemic has cast doubt on many investments, pharma stocks have never looked better. The need for novel treatments and therapies is now painfully clear, so pharmaceutical companies’ value is becoming increasingly apparent. Small-cap stocks may be the ideal way to invest in this sector.
After the pandemic, it’s clear that the world needs new answers to healthcare problems. New companies with smaller market caps may be more likely to provide the groundbreaking biotech advances that the medical industry needs. Investing in these businesses could yield significant returns after some time.
Here are five small-cap pharma stocks to invest in this June.
1. Dynavax Technologies (NASDAQ: DVAX)
Dynavax Technologies specializes in developing vaccines, a field that’s seen a lot of traction lately. The company first gained notoriety with HEPLISAV-B, their vaccine against all known subtypes of Hepatitis-B. More recently, Dynavax has been working with the Coalition for Epidemic Preparedness Innovations to develop a COVID-19 vaccine.
Dynavax’s revenues totaled $83.3 million in Q1 2021, with much of that coming from its COVID vaccine project. That’s a $10.9 million increase in revenue compared to Q1 2020, signaling strong growth. As vaccine demand for various diseases continues to rise, you can be sure that companies like Dynavax will keep growing.
2. Iveric Bio (NASDAQ: ISEE)
Iveric Bio takes a narrower approach, focusing on developing treatments for eye diseases like macular degeneration. Since this area of focus covers conditions with few existing treatment options, the potential for growth is significant. Pharma stocks like this with a specific focus benefit from a less crowded market.
Last year, the FDA granted Fast Track designation to Zimura, part of Iveric’s geographic atrophy treatment. This action from the FDA instills faith in the company’s potential for treating conditions with little to no current treatment options. Iveric has also shown strong, steady growth over the past year, especially in the past few months.
3. Provention Bio, Inc. (NASDAQ: PRVB)
Provention Bio, the newest small-cap stocks on this list, is a clinical-stage biopharmaceutical company founded in 2016. The company produces a wide range of treatments, most notably a potential Type 1 diabetes drug. Since 1.5 million Americans are diagnosed with diabetes every year, this treatment has plenty of demand.
Provention has some crucial FDA regulatory decisions ahead of it this year. If these go well, their diabetes treatment could see remarkable growth, and their stocks will go up with it. Recent months have been a little volatile for the company, but it’s emerging strong out of May.
4. BiomX (NYSE: PHGE)
BiomX started as a SPAC, a category that collectively raised $64 billion in 2020, and has shown bullish momentum lately. The company focuses on products that target and kill harmful bacteria, a growing concern after more than a year of dealing with deadly pathogens.
After its Q1 2021 reportings, BiomX shares jumped 6% in one day, signaling its enticing potential. Market experts have unanimously rated this stock as a buy, and as awareness of infectious pathogens spreads, demand for companies like BiomX will keep rising.
5. Clean Power Capital Corp. (CNQ: MOVE.CN)
Clean Power Capital Corp. is the only entry on this list on a non-U.S. stock exchange but has shown impressive growth lately. The Vancouver-based venture capital firm focuses on more than just pharmaceuticals but has a keen interest in medical cannabis and the biomedical sector.
Clean Power Capital showed a remarkable 1,250% trailing return over the past year. Its interest in groundbreaking sectors like medical cannabis and renewable energy-powered medicine also gives it plenty of room to grow in the future.
Small-Cap Pharma Stocks Show Significant Potential
These five companies don’t represent all small-cap pharma stocks but are among the most promising right now. Businesses like these will continue to see impressive growth as the world renews its focus on medical innovation after the COVID-19 pandemic. Buying these stocks now can be a worthwhile investment.
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