Investing in microcap biotech stocks can be a good idea for investors who are looking for stocks with a high level of profit potential. These stocks can also be a great way to get started in the industry. But which biotech stocks should you invest in?

Exelixis

During the last five trading days, Exelixis’ shares have dropped roughly 20%. These shares have fallen to a low of $4.25, after the company released disappointing clinical trial results. This could be attributed to a slew of reasons, but the main one is that Exelixis’ shares are trading at a price-to-earnings ratio of nine times forward earnings.

Exelixis is a genomics-based biopharmaceutical company focused on oncology treatments. It is currently developing innovative therapies and has the ability to transform the challenges of drug development into opportunities.

Exelixis is spending an enormous amount of money on developing its pipeline and expanding its target market. As of the end of the first quarter, the company had more than $1 billion in cash on hand. It is likely that Exelixis will see revenue grow significantly in the coming years. It is also likely that the company will continue to generate significant profits for years to come.

The company is also advancing its XL092 product, which is an oral tyrosine kinase inhibitor (TKI) that targets MET, TAM, and other kinases. It is expected to enter pivotal studies in the near future.

Exelixis’ biggest drug, Cabometyx, has become a key driver of Exelixis’ earnings growth. It earned a significant regulatory win in January of 2021. However, the company is not done earning new approvals for the drug. This could cause headwinds for the company in the future. The company is also facing new competition for Cabometyx.

The company announced a large equity offering in early August. It is estimated that the company will spend around $875 million on R&D this year. It also announced that it is launching a new kidney cancer drug.

Biogen

Founded in 1978, Biogen is a pharmaceutical company headquartered in Cambridge, MA. It is one of the world’s largest biotech companies and specializes in neurological diseases. It has offices in Germany, China, Australia, and New Zealand. It is listed on the NASDAQ Exchange.

The company develops multiple sclerosis drugs such as Neulasta and Prolia. It also has a pipeline of other drugs for treating Alzheimer’s, hepatitis C, HIV/AIDS, and influenza. It is also a member of the Fortune 500 list of the world’s largest employers.

The company’s stock price has been falling in recent weeks, despite a strong beat-and-raise earnings report. However, the stock has bounced back 8% in the past week.

Biogen stock’s current list price is around $56k, down from more than $130k just one year ago. It’s trading at around three times sales. The company also has a lot of debt. It finished the third quarter of 2021 with nearly $7 billion in debt. However, the company ended the quarter with $2.6 billion in free cash flow.

The company’s stock price has fallen despite continuing enthusiasm for the company’s Alzheimer’s drug. Biogen was the first company to receive an approval for an Alzheimer’s treatment.

The company is undergoing cost-containment measures. It also has license agreements with Samsung Bioepis Co., Ltd. and Neurimmune SubOne AG. It also has a collaboration with MedRhythms, a digital therapeutics company based in Portland, Oregon.

It is unclear who will replace Michel Vounatsos as the company’s CEO. However, it seems likely that he will step down after the FDA approves Aduhelm, a new Alzheimer’s drug.

It’s unclear how the drug will impact Biogen’s sales. The company has said that Aduhelm is unlikely to become a blockbuster product. However, it’s possible that the drug will prove to be effective.

Aerovate Therapeutics

Founded in 2018, Aerovate Therapeutics is a clinical-stage biopharmaceutical company focused on the development of drugs for rare cardiopulmonary diseases. Its initial focus is on the AV-101 dry powder inhaled formulation of imatinib for pulmonary arterial hypertension (PAH). Its clinical trials include a Phase 3b trial evaluating safety and efficacy of AV-101. Its upcoming Phase 2b trial will evaluate the safety and efficacy of a second generation candidate.

Earlier this month, Aerovate Therapeutics raised $121.5 million in an IPO. The company is the 10th Massachusetts-based biotech to hold an IPO this year. Its stock is trading under the ticker AVTE. Its largest shareholder is Sofinnova Investments, Inc. Its largest shareholder is also its largest benefactor, with the exception of Jefferies LLC.

Aerovate was a stealthy apparition for two years, incubated by life sciences venture capital firm RA Capital Management. Its performance report page is chock-full of expanded historical information. Aside from Aerovate, two other biotechs held their IPOs in the last few weeks: Cyteir Therapeutics and Monte Rosa Therapeutics. Cyteir is a nanocap biotech, while Monte Rosa is a microcap biotech. Both companies have received a nod in the biotechnology media. Cyteir is a biotech company that focuses on serious diseases, while Monte Rosa is a biotech company that focuses largely on rare cardiopulmonary diseases.

Aerovate’s upcoming IMPAHCT trial is a proof of concept for evaluating the safety and efficacy of AV-101. The company plans to file an IND for its first clinical candidate in Q4 2021. The company has announced plans to cut its workforce by 30%, as it looks to reduce the burn.

Aerovate’s most noteworthy product is its AV-101 dry powder inhaled imatinib for the treatment of PAH. Aside from its AV-101, Aerovate has two other products in clinical development: a second-generation candidate with half-life extension technology, and a patented formulation of the COVID-19 vaccine.

Novavax

Despite the fact that Novavax has not yet produced a commercial product, the company has plenty of other products in its pipeline. Its flagship product is the COVID-19 shot, which will be tested in the U.K. in September. Despite the fact that the vaccine has been delayed several times, it is not out of the question that it will be approved in the near future.

It is also possible that Novavax will develop a new flu vaccine, which could be a recurring revenue source. The company’s Nanoflu vaccine was reported to have some impressive phase 3 data last year.

Despite the fact that Novavax hasn’t produced a commercial product yet, it has a huge pipeline of potential infectious disease vaccines. It also has a couple of products in late-stage clinical trials.

It also has a manufacturing facility that it is investing in. In addition, Novavax has a few supply agreements in place around the world. The company’s cash position is $1.4 billion.

Novavax is in the process of developing a new vaccine that targets the Omicron variant of the novel coronavirus. According to a press release from Novavax, this version of the virus is considered the dominant strain worldwide.

Novavax’s COVID-19 shot is expected to begin commercial deployment in the near future. In fact, it is already generating some impressive pre-orders.

However, Novavax has had several manufacturing and purity issues. This has resulted in it having to reschedule the start of its US Phase-3 clinical trial twice. In addition, the company has had to move employees off of its payroll.

Novavax has also received a nice boost in funding from the Federal government. The company has received $1.6 billion in funding to develop new vaccines for infectious diseases. The company has eight candidates in its pipeline.

Illumina

Currently, Illumina is the leading player in the genome sequencing industry. It offers a wide array of genetic analysis products and services for both commercial and academic institutions. It has installed a global base of almost 11,600 systems.

Illumina is a company that develops life science tools, integrated systems, and microarray services. Its products are used by research laboratories, hospitals, academic institutions, and pharmaceutical companies. Its genome sequencing devices are used to measure genetic variations that correlate with disease.

Illumina’s products are also used for prenatal testing. Last year, the company processed nearly 1 million prenatal tests. It also offers non-invasive prenatal tests in 25 countries.

Illumina’s revenues increased 27% year-over-year. It also exceeded revenue estimates. The company’s net income increased to $0.76 billion. The company also beat earnings estimates by $0.02. The company also warned that second quarter results will be hit by the COVID-19 crisis.

The company’s operating costs increased due to increased R&D investments. However, Illumina’s HiSeq X Ten product is low cost and began shipping in the first quarter of this year. It received 104 orders during the quarter.

Illumina’s stock has been trading well since the end of April. The stock reached a record high of $524 earlier this month. However, it has now fallen by 6%. The stock is currently trading at 7.8 times trailing revenues.

The company has a strong product pipeline. It is working on commercializing cancer screening tests. It is also developing a drug for chemotherapy patients called Neulasta.

Illumina has a strong financial position, with a cash balance over $248 million. The company’s management is well-known for its capital allocation prowess. Its product line is expanding and it is well positioned to take on new competitors.