RedChip’s Top Small-Cap Stocks Produce Big Gains for Investors in 2018
The Russell 2000 small-cap index has been making new record highs for a few weeks now, while the S&P 500 is still more than 3% off its all-time high from earlier this year. This is the biggest period of outperformance since 2010 for the small-cap space.
Year-to-date, the Russell 2000 is up more than 8%. The S&P 500 is up just 3.7% during the same period.
At RedChip, the outperformance of our top small-cap stocks is even more impressive. Our top four small-cap stocks alone are up 76% on average year-to-date.
TapImmune – An Emerging Leader in Immunotherapy
Leading the pack this year is TapImmune (NASDAQ: TPIV), up 89.1% in 2018.
TPIV is focused on developing new immunotherapies for cancer. It’s conducting various Phase 2 and Phase 1b/2 clinical trials for the treatment of ovarian and breast cancers.
The company recently announced a merger agreement and reorganization with privately held Marker Therapeutics. TPIV then announced the formation of a Scientific Advisory Board after the close of the proposed merger on May 16.
According to WBB Securities analyst Steven Brozak, “We have previously commented in a note our continued interest in TPIV’s strategic move to merge with Marker, as the clinical assets carry data that cannot be overlooked, and the proposed management advisory, as well as directorship of the combined company place prominence on TPIV to be a leader in the cell therapy space.”
TPIV is also seeking to complete a strategic alliance with Baylor College of Medicine that would involve sponsored research, manufacturing support, and the advancing of early-stage clinical trials at the institution, according to WBB Securities.
Catasys – Using Big Data to Improve Healthcare
Another RedChip Nation small-cap stock, Catasys (NASDAQ: CATS), produced big gains for investors this year, up 84.3% since the start of the 2018.
CATS is a technology-enabled healthcare company that harnesses proprietary big data predictive analytics, artificial intelligence, and telehealth, combined with human intervention, to deliver improved member health and cost savings to health plans through integrated technology-enabled treatment solutions.
With a recent agreement signed in late May 2018, CATS is now contracted with seven of the top eight insurers nationwide, with services now available in 20 states across the U.S., including the highly coveted California market.
The company’s flagship OnTrak solution is designed to identify, engage, and treat members with untreated or undertreated behavioral health conditions that impact co-morbid medical conditions, such as diabetes, hypertension, coronary artery disease, COPD, and congestive heart failure.
Insurance companies are attracted to CATS’ innovative solution due to its proven ability to lower medical costs for targeted members.
In its most recently reported quarterly results, enrollment in CATS solutions was up 74% year-over-year.
This strong growth led management to reiterate its guidance of reaching $20 million in annual billings for 2018, with an expected run-rate of $25 million by year-end. It’s important to note this guidance was issued prior to the company’s latest carrier agreement, which opened access to the sizeable California market.
According to Rick Anderson, President and COO of CATS, “We expect to see additional program expansions with existing health plan partners, as well as enrollment launches with new partners as we progress further into 2018.”
CATS has proven its ability to execute, and Wall Street is rewarding it accordingly.
Sorrento Therapeutics – Fighting Cancer with Antibody-Centric Therapies
Sorrento Therapeutics (NASDAQ: SRNE), a clinical stage, antibody-centric, biopharmaceutical company developing new therapies to turn malignant cancers into manageable and possibly curable diseases, is up nearly 60% year-to-date.
A string of positive developments and milestone achievements since the start of the year underpins SRNE’s impressive 2018 performance, including:
- INDs accepted in China (01/28/18) and South Korea (02/05/18) for two of SRNE’s partnered PD-L1 antibodies and are currently recruiting patients
- NDA approval of ZTlido(TM) (topical lidocaine system) 1.8% (02/28/18)
- IND submission for its lead program, CD38 CAR-T (03/08/18)
- Completed treatment of first cohort (03/12/18) and entered into second cohort treatment in the epidural RTX trial for intractable cancer pain (RTX-001)
These achievements, combined with a major $120 million financing in March, ideally position SRNE for further success in 2018 and beyond.
The company is now well-positioned to execute on commercialization efforts, enter into strategic partnerships, and advance its clinical stage assets, including:
- 1H18 CD38 CAR-T Phase 1 clinical trial for relapsed or refractory multiple myeloma (with our partner, Celularity Inc.)
- 1H18 RTX IND filing and first patient enrolled for intra-articular osteoarthritis pain
- 2H18 combination trial for oncolytic virus Seprehvir(R) and CEA CAR-T for solid tumors
- 2H18 phase 1b clinical trial completion for CEA CAR-T in liver metastasis of primary solid tumors
Achieving these and other milestones should add further upside momentum to the stock, fueling potentially big gains for investors.
Immuron – Leveraging the Body’s Microbiome to Treat Multiple Diseases
Immuron (NASDAQ: IMRN), an Australian microbiome biopharmaceutical company focused on developing and commercializing orally delivered targeted polyclonal antibodies for the treatment of inflammatory mediated and infectious diseases, is up more than 75% in 2018.
In May, IMRN announced positive results from its preclinical program targeting colitis.
The results reported clearly demonstrated that oral treatment with IMRN’s flagship IMM-124E resulted in significant alleviation of colitis symptoms.
Early this year, IMRN reported positive results for its Phase 2 NASH clinical trial.
Commenting on the trial results, interim CEO Jerry Kanellos stated, "The Board of Immuron and Executive Management are very proud to have progressed our lead drug candidate IMM-124E to Phase 2 proof of principle clinical trials. This has been a significant undertaking by the company, and these results represent an opportunity for significant value creation for our loyal shareholders who have supported us over the journey.”
Unlike most smaller development-stage biopharma companies, IMRN has the benefit of a growing revenue base from its Travelan product, an over-the-counter gastrointestinal and digestive health supplement for the treatment of traveler’s diarrhea.
As of the end of March this year, the company’s third quarter of fiscal 2018, Travelan sales were up 178% year-over-year.
In addition to the growing distribution of Travelan, a ground-breaking U.S. Department of Defense (DoD) research report was announced in January 2018.
The primary goal of the DoD program was to investigate Travelan's immunological reactivity with pathogenic bacteria including Campylobacter, enterotoxigenic E-coli and Shigella.
The tested bacterial isolates originated from the Armed Forces Research Institute of Medical Sciences (AFRIMS) in Bangkok, Thailand, an overseas laboratory of the Walter Reed Army Institute of Research (WRAIR) library of infectious diseases. The pathogenic bacteria were retrieved from infected personnel deployed in Bhutan, Cambodia, Nepal, and Thailand over a 20-year period.
The research findings have provided further data to build on existing clinical trial results for Travelan and have provided IMRN with a powerful message to take to the market that the antibodies in Travelan were able to bind and were reactive to all 180 strains of bacteria tested demonstrating the broad spectrum antimicrobial potential of the product.
Combined with the company’s major milestone achievements in its lead clinical programs, IMRN is ideally positioned for further upside.