Stock Market

7 Small-Cap Biotech Stocks to Watch for Upcoming Catalysts

Ever since “meme stock madness” screeched to a halt, small-cap stocks have been in a slump. That’s been especially the case for speculative biotech plays. Earlier this year, speculators on platforms like Reddit’s r/WallStreetBets sent scores of small biotech stocks “to the moon” on little more than hype.

But, now, online chatter isn’t enough anymore. For these kinds of high-risk plays to see big moves, they need to wow investors with game-changing catalysts. For some plays, unfortunately, that’s not going to be the case. With the hype still fading, they face continued moves lower, as the meme stock crowd chases after crypto instead.

Yet, in the vast field of biotech names, there are a few strong opportunities. Some have very timely catalysts. That is, candidates that could either vaccinate against, or treat, the novel coronavirus. Others are less headline-making. But, they too could see big boosts if their drug candidates make progress in clinical trials.

So, which small-cap stocks in the biotech space could make game-changing moves in the near future? These seven, although still risky bets, may break out once again:

  • Agenus (NASDAQ:AGEN)
  • Atossa Therapeutics (NASDAQ:ATOS)
  • Cocrystal Pharma (NASDAQ:COCP)
  • Avid Bioservices (NASDAQ:CDMO)
  • Ocugen (NASDAQ:OCGN)
  • SIGA Technologies (NASDAQ:SIGA)
  • Sio Gene Therapies (NASDAQ:SIOX)

Small-Cap Stocks: Agenus (AGEN)

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An immuno-oncology play, Agenus shares were flying high at the peak of the meme stock/Reddit stock phenomenon. It may not have been a “to the moon” moment for the stock. But, rallying from around $3.25 per share at the start of 2021, to around $5.20 per share in early February, some nimble traders likely pocketed fast profits.

But, as hype around small-cap stocks has taken a breather, so has interest in AGEN stock. Shares have not only given up their gains. At recent prices (about $3.13 per share), they are slightly down year-to-date. Yet, this could reverse, given the possible catalyst in its flagship candidate, Balstilimab.

A therapy for recurrent/metastatic cervical cancer, the company has recently submitted Balstilimab for accelerated Food and Drug Administration (FDA) approval. This is following positive results from a recent clinical trial. But, this isn’t the company’s sole catalyst. Other candidates in its pipeline, like its cancer therapies AGEN1181 and AGEN1777, show strong promise as well.

The company is burning through cash ($45 million in the most recent quarter). This may signal it will have to replenish its current cash reserves (around $119 million) with new capital, most likely from dilutive stock offerings. Even so, there’s big potential for it to strike success with Balstilimab. Or, with its other in-progress immuno-oncology candidates. This speculative small-cap biotech play may be something to keep an eye on as it trades for around $3 per share.

Atossa Therapeutics (ATOS)

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Still in its clinical-stages, Atossa was first focused on treatments for breast cancer. But once Covid-19 hit, the company sprung into action, fast-tracking two treatments to tackle the virus.

First is its nasal spray product, currently known as AT-301. After its positive Phase 1 results (released back in February), the product is currently in Phase 2 clinical trials. Second is Atossa’s AT-H201 treatment, also known as HOPE. Yet, the proprietary drug combination, intended as an alternative to vaccines, may no longer be necessary. At the time of its initial development, there were plenty of doubts a vaccine would come out in time.

Even if its Covid-19 catalysts fail to pan out, ATOS stock could still see a boost thanks to the company’s breast cancer candidate. It too may be still at the development stage. But, Endoxifen has fared well in past studies.

And, that’s not all. What’s been driving the stock (currently at $2.74 per share) higher as of late? News of the potential for Endoxifen being a treatment for ovarian cancer. Chock full of catalysts, this speculative biotech small-cap stock is definitely one to keep an eye on in the near-term.

Small-Cap Stocks: Cocrystal Pharma (COCP)

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COCP stock has garnered a greater level of attention recently. Shares saw a quick pop on May 4. So, what’s the story here? As InvestorPlace’s Robert Lakin wrote that same day, investors jumped in on news of the biotech company’s progress with its antiviral Covid-19 drug candidates.

But, the stock’s double-digit pop was quickly followed by a big drop. The reason? News of Cocrystal closing on a dilutive secondary offering. Unlike in previous months, when investors were less concerned with dilution, markets shied away following this news, sending the stock back to prior price levels.

Yet, that may not mean the opportunity has passed here with COCP stock. Yes, it’s possible that further news on the progress of its candidates won’t be so rosy. That may be enough to send this low-priced penny stock (currently trading for around $1.32 per share) down to sub-$1 per share levels.

However, if future progress is rosy? It may be enough to fuel a triple-digit percentage rally for shares. It’s a highly risky play, in what’s already a very risky area to invest (Covid-19 related stocks). But, with the rewards likely ample, this may be a solid setup for more investors looking to roll the dice a little.

Avid Bioservices (CDMO)

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Back in February, I discussed how Avid Bioservices was one of many biotech companies tackling what’s known as “long haul Covid-19.” That is, chronic symptoms of the novel coronavirus.

This company, a contract development and manufacturing organization, or CDMO, as its ticker suggests, may not be a biotech stock per se. So, where does it get its Covid catalyst? Via its providing contract manufacturing deal with Humanigen (NASDAQ:HGEN). As you may know, that biotech company is looking to market its Lenzilumab product as a possible treatment for long-haul Covid-19.

After a prior surge at the end of 2020/start of 2021, shares in both names calmed down a bit for several months. But, starting late last month, interest has picked up yet again. What’s behind this? As a Motley Fool commentator broke it down, positive news for Lenzilumab’s Covid-related use sent shares back on an upward trajectory.

The development may have resulted in a more muted boost for CDMO stock. Also, shares have pulled back to around $20 per share from their post-news pop. Yet, with the potential for more encouraging Humanigen-related news, it could continue to trend upwards, due to its indirect exposure to this catalyst.

Small-Cap Stocks: Ocugen (OCGN)

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If you’ve read my prior articles on OCGN stock, you know I’m skeptical of its Covid-19 catalyst. The company is looking to obtain emergency use authorization for Covaxin, developed by India-based Bharat Biotech. With its move from $15 per share back to around $9 per share, investors are starting to share in my skepticism.

What is driving this sudden change of heart? Ocugen’s recent quarterly results. The company may seem like an appealing opportunity on the headlines. Yet, looking at the financials, investors may have gotten ahead of themselves bidding this stock up on the headlines alone.

Worse yet is the long-shot odds of this becoming a widely-used vaccine in the United States. The country has more vaccines than it knows what to do with. Not only that, there are still high levels of hesitancy among many about getting one. This points to there not being enough room for a fourth option.

That being said, given the “meme stock nature” of OCGN stock, a small amount of positive news may be enough to send it soaring once again. Those looking to take a gamble on a coronavirus-related play could find it appealing. But, even with its timely catalyst, this may be something most investors will want to pass on.

SIGA Technologies (SIGA)

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In the age of Covid, who’s worrying about smallpox? It may have been eradicated back in 1980. But, there’s still the risk vials of it from laboratories could be used as bio-weapon. As a result, there’s still a market for backup smallpox treatments. And, it’s through this niche market that SIGA Technologies has so far found success.

The company’s flagship product is TPOXX, an oral antiviral drug for smallpox. It’s been selling the product for several years. But, as a Seeking Alpha commentator broke it down, there are few developments that could point to higher prices for shares. First, the company earlier this year inked a $33 million order with the Public Health Agency of Canada. Second, the company’s pursuit of a deal with health authorities in the European Union.

Right now, shares are cheap. They sport a price-to-earnings, or P/E, ratio of  around 9.1x. But, it’s with a caveat. Due to the lumpy nature of its revenues, investors are hesitant to give the stock a high valuation. Yet, if it can continue to sign deals in new markets, we may see more consistent results going forward. This may result in multiple expansion.

Relatively more mature, this may be a less exciting biotech play than the other small-cap stocks still at the clinical stage. But, as a more value-oriented play in the biotech space, consider SIGA stock worthy of consideration.

Small-Cap Stocks: Sio Gene Therapies (SIOX)

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A developer of gene therapies for neurological disorders, Sio Gene Therapies was previously known as Axovant until last November. Given its past lack of success, there’s no question why the company went through a re-branding. But, don’t read too much into its past hiccups. They do not mean this company will again fail to have a hit on its hands.

In fact, a few days from now, the company (at a gene and cell therapy conference) will present new details on several of the leading candidates in its pipeline. As seen from its choppy price action, investors haven’t exactly been champing at the bit to buy this ahead of this possible big-time development.

But, while investors-in-general have yawned about the stock, its insiders have not. That’s clear from the insider buying by its CEO, Pavan Cheruvu. Those in the know may be confident the coming months will see SIOX stock, which at around $2.75 per share is down more than 50% from its highs, can get out of its current slump.

Yet, it’s not guaranteed that it’s all uphill from here. Investors may wind up disappointed with the upcoming findings. But, while risky, the possible gains from progress may exceed the risk the company, which has yet to have a breakout hit, underwhelms yet again.

On the date of publication, Thomas Niel did not (either directly or indirectly) hold any positions in the securities mentioned in this article.

Thomas Niel, contributor for, has been writing single-stock analysis for web-based publications since 2016.

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