These Six Clinical-Stage Biotech Stocks Are Developing Promising Treatments for Hard-to-Treat Diseases
Biotechnology has been a favorite industry of the market at different times in recent years, although 2023 hasn't been particularly kind to the industry as a whole. However, the Nasdaq Biotechnology Index is up 15% over the last five years, indicating that there are some gains to be had over the long term with careful selection.
Unfortunately, picking potential winners from a large number of clinical-stage biotech names can be a bit tricky and requires careful due diligence. However, there are several small- and micro-cap biotechnology stocks that look promising based on their science and areas of focus.
Here are six small- and micro-cap biotech stocks with interesting and potentially promising treatments in the clinical stage.
Coya Therapeutics
Coya Therapeutics (COYA) is developing treatments for neurodegenerative, autoimmune and metabolic diseases using regulatory T cells (Tregs). Tregs are a type of white blood cell tasked with modulating the body's immune response, ameliorating inflammatory reactions and mechanisms, and inhibiting the release of pro-inflammatory cytokines.
The lead candidates in Coya's pipeline are treatments for amyotrophic lateral sclerosis (ALS) and Alzheimer's disease. COYA 301 is a low-dose interleukin-2 that's also a Treg-enhancing biologic. IL-2 is a key cytokine within the immune system.
A proof-of-concept open-label study in Alzheimer’s patients treated with low dose IL-2 was completed in eight patients with mild-to-moderate Alzheimer’s disease and resulted in statistically significant improvements in cognitive function on one widely used scale which measures cognitive symptoms and no cognitive decline on two other widely used cognitive scales.
Based on these findings, The Gates Foundation and Alzheimer's Association funded a double-blind, placebo-controlled study for low dose IL-2 in patients with mild-to-moderate Alzheimer's, which has just been fully enrolled. Topline results are expected to be reported in 2024.
COYA 302 combines COYA 301 with the fusion protein CTLA4-Ig. Coya previously reported amelioration of progression in patients with ALS in a proof of concept study using this combination of drugs. In early October, Coya presented experimental data supporting the mechanism of action for COYA 302 to treat ALS. The company is now planning to initiate a double-blind, placebo-controlled study to evaluate the efficacy and safety of COYA 302 in ALS patients.
Arvinas
Arvinas (ARVN) has developed a drug-development platform called PROTAC, which is enabling it to create an entirely new class of medications based on targeted protein degradation. Specifically, the company is working on treatments for various cancers and neurodegeneration, including for illnesses that have traditionally been seen as "undruggable."
Arvinas' protein degraders, which it calls "chimeras," are designed to harness the body's natural protein disposal system to selectively degrade and remove any proteins that are causing disease. The company has several drugs in its pipeline, although its ER+/ HER2 breast cancer candidate, vepdegestrant, is the furthest along, having reached Phase 3 clinical trials.
It also has two treatments for mCRPC, a form of prostate cancer that has spread beyond the prostate, in Phase 2 clinical trials. Arvinas is also developing treatments for solid tumors, non-small cell lung cancer and pancreatic cancer, Parkinson's disease, multiple system atrophy (MSA), Huntington's disease, and Alzheimer's. All of these other candidates are currently in the preclinical stage.
CorMedix
CorMedix (CRMD) is working on a catheter lock solution to prevent catheter-related bloodstream infections (CRBSIs) in patients receiving hemodialysis therapy for end-stage kidney disease. The company is working on various applications for its lead product candidate, taurolidine, which is derived from the natural amino acid taurine.
CorMedix's flagship investigational drug product is DefenCath, a proprietary formulation that combines taurolidine with the anticoagulant heparin. Taurolidine is a synthetic broad-spectrum antimicrobial and antifungal with anti-inflammatory and possibly anti-tumor properties. Products containing taurolidine have already been marketed in Europe for many years.
CorMedix completed a multi-center Phase 3 clinical trial on DefenCath in hemodialysis patients and found that 41 of the 795 participating patients developed a CRBSI, consisting of 32 in the control group and nine in the DefenCath group. That result suggests a 71% reduction in the risk of developing a CRBSI. The company also plans to test its catheter lock solution for other related uses.
Ocuphire Pharma
Ocuphire Pharma (OCUP) is developing small molecular product candidates to treat front- and back-of-the-eye conditions with a focus on retinal and refractive eye disorders.
The lead candidate in Ocuphire's pipeline is APX3330, an oral medication that aims to treat diabetic retinopathy and diabetic macular edema. APX3330 completed a Phase 2 trial and now is heading toward a special protocol assessment (SPA) submission.
Ocuphire also partnered with Viatris (VTRS) on its late-stage candidate, phentolamine, which has been approved and now is sold under the brand name Ryzumvi to treat pharmacologically induced mydriasis. The company is also in the process of submitting an SPA in the treatment of dim light or night vision disturbances through its partnership with Viatris.
Rocket Pharmaceuticals
Rocket Pharmaceuticals (RCKT) is developing a pipeline of genetic therapies targeting the root cause of complex and rare life-threatening illnesses. The company's pipeline consists of first-in-class gene therapies that incorporate adeno-associated viral vector (AAV) with lentiviral vector (LVV) approaches.
Rocket chooses indications driven by a single gene in certain types of cells and develops therapies that directly target the genetic mutation in those cells. The company's pipeline includes hematology and cardiovascular treatments. LV RP-L201 to treat leukocyte adhesion deficiency is the candidate that's the furthest along. The Food and Drug Administration has accepted Rocket's approval filing for the drug and now is expected to finish its review on March 31, 2024, which has been set as the PDUFA (Prescription Drug User Fee Act) date.
Rocket also has a treatment for Fanconi anemia (LV RP-L102) in a Phase 2 trial, a treatment for Danon disease (AAV RP-A501) close to the end of a Phase 1 trial, and a treatment for pyruvate kinase deficiency (LV RP-L301) in a Phase 1 trial.
Ventyx Biosciences
Ventyx Biosciences (VTYX) is developing novel oral therapies for patients with autoimmune and inflammatory diseases. The company's pipeline includes four candidates that target the innate and adaptive immune system. VTX958 to treat psoriasis, psoriatic arthritis and Crohn's disease is the furthest along, moving beyond Phase 2 trials, although VTX002 to treat ulcerative colitis isn't far behind.
Ventyx is also developing VTX2735 to treat CAPS, an autoinflammatory disease linked to mutations in the NLRP3 gene. Other potential targets for this candidate include various rheumatologic and dermatologic diseases. VTX2735 is in Phase 2 trials. Finally, VTX3232 is in a Phase 1 trial to treat neuroinflammatory diseases.
Investing in small- and micro-cap biotech stocks
Investors with an appetite for risk might be particularly interested in the potential that may exist across the entire biotech sector. With great risk comes the possibility of great reward, but the path forward for any biotech stock is rarely in one direction.
Biotech stocks tend to be quite volatile because they rise and fall dramatically with the release of every bit of data, no matter how large or small. Thus, investors are always advised to do their own due diligence before investing in any stock — and to keep close tabs on any biotech stocks they invest in because their stock prices can change rapidly with no warning.
Ari Zoldan is CEO of Quantum Media Group, LLC. Coya Therapeutics is a client of Quantum Media Group.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Ari Zoldan
Ari Zoldan is the CEO of New York-based Quantum Media Group, LLC. The company provides investor relations, public relations and equity research services to publicly traded companies. As an on-air media personality, Ari can be seen regularly on major media outlets and is frequently quoted in mainstream news outlets covering business, innovation and emerging trends.
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