Small cap biotech stocks are giving investors new ways to make big money. Many scientists believe that we’re in the golden age of innovation in the ways we treat diseases. Moreover, this presents a unique opportunity for investors.

COVID-19 brought a lot of attention to the biopharmaceutical industry. 2021 proved to be a record-setting year with the development of vaccines for the pandemic. However, biotech, covers far more than vaccine developments.

These companies are the future of modern medicine. Humanity is continuing to take leaps in understanding human biology and the biology of various diseases. As a result, biotech companies are able to better target illnesses. Furthermore, new advances in science are opening doors for the treatment and prevention of diseases like never before.

There’s an opportunity for big gains in the biotechnology sector. However, you should know that the industry comes with some risks. So, if you can stomach high-risk investments with the potential for high returns, small cap biotech stocks might be your cup of tea.

It’s important to judge biotech stocks as more companies enter the market. To make things easier, we’ve put together a list of small cap biotech stocks worth watching. So, let’s take a look…

biotech research and looking at small cap biotech stocks

Top 3 Small Cap Biotech Stocks to Watch

These are a few small cap biotech stocks to watch closely in 2022…

  • Dynavax Technologies (Nasdaq: DVAX)
  • Viridian Therapeutics (Nasdaq: VRDN)
  • Aerovate Therapeutics (Nasdaq: AVTE)

Dynavax Technologies

Dynavax is a biopharmaceutical company that uses Toll-like receptor biology for the development of vaccines. Specifically, the company has developed HEPLISAV-B, a vaccine to help prevent subtypes of the Hepatitis B virus in adults 18 years and older. HEPLISAV-B is approved and commercialized in the U.S. and the European Union.

Dynavax’s HEPLISAV-B contains a proprietary toll-like receptor 9 agonist adjuvant called CpG 1018. Moreover, the company is leveraging its CpG 1018 adjuvant to provide long-term value. While driving revenue, the company collaborates with other companies to advance the adjuvant as a premier vaccine adjuvant.

Current collaborations are focused on adjuvanted vaccines for COVID-19, plague, Tdap and universal influenza. This should be a huge growth driver for the company over 2022. As a result, Dynavax is one of the top small cap biotech stocks to watch in 2022.

Viridian Therapeutics

Viridian Therapeutics is a biotechnology company advancing new treatments for serious diseases that are underserved. The company’s headquarters are in Boulder, Colorado, with research and development operations in Waltham, Massachusetts.

Viridian’s lead program, VRDN-001, is a monoclonal antibody targeting the insulin-like growth factor-1 receptor (IGF-1R) for thyroid eye disease. ImmunoGen previously developed the IGF-1R antibody. Viridian’s development plans for VRDN-001 are informed by pharmacokinetic, pharmacodynamic, safety and tolerability data collected in that program.

In 2020, the company obtained exclusive rights from ImmunoGen to develop, manufacture and commercialize VRDN-001. It is suitable for all non-oncology indications that do not involve radiopharmaceuticals, including the treatment of TED.

Furthermore, the company is developing a second-generation candidate, VDRN-002. The product is distinct from VRDN-001 due to its half-life extension technology and subcutaneous administration. The company filed an Investigational New Drug (IND) application for VRDN-001 in October 2021. It plans to file an IND for VRDN-001 in Q4 2021. As a result, this progress makes this small cap biotech stock an intriguing prospect.

Aerovate Therapeutics

Aerovate Therapeutics is a clinical-stage biotech company. The company focuses on therapies for rare cardiopulmonary diseases.

In December, the company announced the initiation of its Inhaled Imatinib Pulmonary Arterial Hypertension Clinical Trial (IMPAHCT) Phase 2b/Phase 3 trial. The trial will evaluate the safety and efficacy of AV-101 (dry powder inhaled imatinib) in adult patients with Pulmonary Arterial Hypertension (PAH). At the time of the announcement, Aerovate CEO Tim Noyes said…

We are excited and humbled to initiate this Phase 2b/Phase 3 trial of AV-101. Starting enrollment represents an important milestone for Aerovate Therapeutics and advances our goal of improving the lives of patients suffering from rare cardiovascular diseases.

The company will report results from its Phase 2b trial in mid-2023. Trial results showing less adverse reactions from oral imatinib in PAH patients could be a major advancement for patients with cardiopulmonary disease. Furthermore, this presents a huge growth opportunity for Aerovate Therapeutics stock.

The Bottom Line on Small Cap Biotech Stocks

Investors are always on the lookout for good deals. The small cap biotech stocks above have great growth potential. With biotech leading the charge to find treatments for diseases, cancers, and viruses, investor interest is at an all-time high.

Nevertheless, not every investor can handle the risk. So, you’ll need some risk tolerance if you want to invest in small cap biotech stocks. However, if you can stomach it, your investment may have the potential to outpace the market.

Furthermore, for more biotech investing opportunities, check out these biotech penny stocks to consider for your portfolio.

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