The NASDAQ Biotechnology Index (INDEXNASDAQ:NBI) is trading at three-year highs in response to breakthrough innovations and increased deals for biotech stocks on the NASDAQ.
After dropping to a low of 3,637.05 in October 2023, the index climbed to a high of 4,954.813 on September 19, 2024. While the NBI is trading down at 4,399.36 as of January 7, 2025, further growth could be in store in the future. However, the current economic environment means the biotech sector may have a complex road ahead.
According to a recent report from Precedence Research, the global biotech market is expected to grow at a compound annual growth rate of 11.5 percent from now to 2034, reaching a valuation of US$4.61 trillion.
Driving that growth will be favorable government policies, investment in the sector, increased demand for synthetic biology and a rise in chronic disorders such as cancer, heart disease and hypertension.
The top NASDAQ biotech stocks have seen sizeable share price increases over the past year. For those interested in investing in biotech companies, the best-performing small-cap biotech stocks are outlined below.
Data was gathered on January 7, 2025, using TradingView’s stock screener, and all top small-cap biotech stocks in the list had market caps between US$50 million and US$500 million at that time.
1. Bright Minds Biosciences (NASDAQ:DRUG)
Year-over-year gain: 2,232.41 percent
Market cap: US$281.1 million
Share price: US$40.22
Bright Minds Biosciences is developing novel treatments for pain and neuropsychiatric disorders such as epilepsy, post-traumatic stress disorder and difficult-to-treat depression.
The company’s platform includes serotonin agonists designed to provide powerful therapeutic benefits while minimizing the side effects.
Bright Minds is currently in Phase 2 clinical trials for its BMB-101, a highly selective 5-HT2C receptor agonist, in adult patients with classic absence epilepsy and developmental epileptic encephalopathy.
Bright Minds Biosciences’ stock rocketed upwards in the fourth quarter, shooting up from US$2.49 to US$38.49 in one day on October 15. The company issued a press release stating it was ‘unaware of any material changes in the company’s operations’ that would have contributed to such a rally. The outperformance instead appears to be related to the October 14 announcement of Danish pharma company Lundbeck acquiring Longboard Pharma, another biotech company developing a 5-HT2C receptor agonist, for US$60 per share.
A few days later, Bright Minds announced a non-brokered private placement of US$35 million, which sent shares up to US$47.21 on October 18.
That same month the company shared its collaboration with Firefly Neuroscience (NASDAQ:AIFF) to use the latter’s advanced artificial intelligence, FDA-cleared BNA technology platform to provide a full analysis of the electroencephalogram (EEG) data from Bright Minds’ BMB-101 Phase 2 clinical trial. This follows the pair’s previous successful collaboration to analyze data from Bright Mind’s first-in-human Phase 1 study of BMB-101.
Bright Minds’ share price reached their highest yearly peak of US$55.77 on November 6.
2. Candel Therapeutics (NASDAQ:CADL)
Year-over-year gain: 518.52 percent
Market cap: US$371.37 million
Share price: US$8.35
Candel Therapeutics is a biotech company focused on developing oncology treatments. The company’s pipeline includes two clinical stage multimodal biological immunotherapy platforms.
Candel’s lead product candidate CAN-2409 is in a Phase 2 clinical trial in non-small cell lung cancer and borderline resectable pancreatic cancer, as well as Phase 2 and 3 trials for localized, non-metastatic prostate cancer. Positive interim data for the trial on pancreatic cancer, released on April 4, 2024, sent the company’s share price spiking upwards. It ultimately climbed to a year-over-year high of US$14.30 on May 16.
More recently, in December 2024, the company released positive topline data for CAN-2409 viral immunotherapy, achieving the primary endpoint in its Phase 3 prostate cancer trial.
Its second lead product candidate is CAN-3110, which is in an ongoing Phase 1 clinical trial in recurrent high-grade glioma (HGG).
The company had a number wins with the US Food and Drug Administration (FDA) in 2024. In February, Candel’s CAN-3110 received regulatory approval for a fast-track designation for the treatment of recurrent HGG. The agency also granted Candel orphan drug designation for CAN-2409 for the treatment of pancreatic cancer in April and CAN-3110 for HGG in May.
3. Rezolute Bio (NASDAQ:RZLT)
Year-over-year gain: 467.04 percent
Market cap: US$314.63 million
Share price: US$5.43
Late-stage biopharma company Rezolute is developing novel therapies targeting rare and chronic metabolic diseases. At the top of the company’s drug pipeline is RZ358, called ersodetug, which is being studied for the treatment of congenital hyperinsulinism and tumor hyperinsulinism. The company also has RZ402, which is targeted for patients with diabetic macular edema.
Ersodetug is currently in global Phase 3 clinical studies for congenital hyperinsulinism, with topline data expected in mid-2025. It opened to US participation in September after the FDA removed partial clinical holds.
In March, Rezolute shared results from a preclinical study that validated ersodetug’s potential to treat patients with non-islet cell tumors that have uncontrolled hypoglycemia. Rezolute announced positive topline results for its Phase 2 study of RZ402 in May.
The biotech stock had a great run up in the second quarter this year, climbing to an H1 2024 high of US$6.799 on June 5. Since then, Rezolute shares have managed to retain much of that value with a series of positive news releases.
The company closed on a public offering with net proceeds of about US$56.4 million later in June, which will help to fund post-Phase 3 planning for its ersodetug program in congenital hyperinsulinism as well as a potential late-stage, registrational, clinical study of ersodetug in patients with tumor hyperinsulinism associated with islet cell and non-islet cell tumors.
In August, the FDA granted clearance for Rezolute’s investigational new drug application for a Phase 3 study of ersodetug in tumor hyperinsulinism. Patient enrollment is slated to begin in the first half of 2025. In December, the FDA granted ersodetug orphan drug status for the treatment of hypoglycemia due to tumor HI.
Rezolute kicked off the new year with another FDA approval, this time garnering the breakthrough therapy designation for ersodetug for the treatment of hypoglycemia due to congenital hyperinsulinism.
4. Entera Bio (NASDAQ:ENTX)
Year-over-year gain: 301.52 percent
Market cap: US$97.61 million
Share price: US$2.65
Entera Bio’s proprietary N-Tab technology oral delivery platform allows for the development of therapies based on peptides and therapeutic proteins. The company is targeting a variety of indications, including osteoporosis, hyperparathyroidism and short bowel syndrome.
The company released a series of significant updates in March and April. This included the announcement of positive pharmacokinetic data for GLP-2 peptide tablet treatment for patients with short bowel syndrome as part of a joint study combining OPKO Health’s (NASDAQ:OPK) proprietary long acting GLP-2 agonist with Entera’s N-Tab technology.
In April, Entera announced the publication of Phase 2 clinical trial data from its EB613 program for osteoporosis. Unlike available osteoanabolic treatments, which are injections, EB613 is a once daily treatment administered through oral PTH(1-34) peptide tablets. According to the release, ‘Significant gains in bone mineral density of the spine and hip were observed at the end of the 6-month study and there were no significant safety concerns.’
Entera Bio’s share price reached its yearly peak of US$2.98 on April 12, 2024.
5. Benitec Biopharma (NASDAQ:BNTC)
Year-to-date gain: 251.42 percent
Market cap: US$258.63 million
Share price: US$11.14
California-based Benitec Biopharma is advancing novel genetic medicines via its proprietary “Silence and Replace” DNA-directed RNA interference platform. The company is currently focused on developing therapeutics for chronic and life-threatening conditions including oculopharyngeal muscular dystrophy (OPMD). Its drug candidate BB-301 was granted orphan drug designation by the FDA and the European Medicines Agency.
In April, Benitec reported positive interim clinical trial data for its first OPMD subject treated with BB-301 in its Phase 1b/2a study. Following the report, Benitec’s share price began trending upward, and reached US$10.47 on May 10.
Benitec is well-funded to advance its BB-301 clinical development program through the end of 2025. The company reported additional positive interim safety and efficacy data in mid-November. The company’s share price hit its highest yearly value on December 11 at US$13.08.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
