7 unknown biotech stocks that could explode in 2023

Investing in early stage or unknown biotech stocks can be likened to investing in cryptocurrency projects. If the developments of the project are positive, the returns can be multiple in a short time. Likewise, biotech stocks can soar when potential blockbuster drugs come to market.

With the covid-19 pandemic, investments have exploded in the biotechnology sector. As the research pipeline for various conditions deepens, investment opportunities continue to expand.

My point is reinforced by the fact that venture capitalists poured $35 billion into biotech companies between 2019 and 2021.

This column focuses on seven unknown biotech stocks that may be potential multi-baggers. Most of these biotech companies are still in the clinical stage of drug development. This involves a high risk. However, a sub-portfolio of clinical-stage biotech stocks can be rewarding even if there are few promising stories.

Let’s take a look at the reasons why these little-known biotech stocks are interesting.

NKTX Nkarta $12.40
IBRX ImmunityBio $4.96
FGEN FibroGen $12.09
HRTX Therapeutic Heron $4.26
RNA Greed Biosciences $20.01
SANA Sana Biotechnologies $6.22
RLAY Therapeutic relay $22.08


Source: CI Photos /

Nkarta (NASDAQ:NKTX) the stock has trended lower over the past 12 months. However, the unknown biotech stock retains its value at current levels. With some promising developments, NKTX stock is expected to increase in 2023.

For clinical-stage biotechnology companies, research funding is a major issue. Nkarta is well positioned on this front with cash and cash equivalents of $415 million in Q2 2022. The cash buffer is sufficient to fund the company’s plans through 2025. Additionally, with no risk of dilution to In the short term, the action is likely to increase on clinical trial results.

Nkarta is a clinical-stage biotechnology company focused on the development of natural killer cell therapies designed to treat cancer. Phase one clinical trials are already underway for two drug candidates.

In April 2022, the company reported positive initial data for these two product candidates and the stock surged. With several milestones to come over the next 12-15 months, I’m bullish on NKTX stock for 2023.


An image of scientists in a laboratory, working at different stations

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ImmunityBio (NASDAQ:IBRX) the stock has also been subdued over the past 12 months. However, clinical developments have been positive and a reversal rally seems overdue.

ImmunityBio focuses on treatments for advanced cancer and infectious diseases. Currently, the company’s pipeline has eight drug candidates for solid tumors. Additionally, there is an infectious disease pipeline that focuses on HIV and Covid-19.

An important point to note is that the company’s bladder cancer treatment candidate is already in Phase 3.

In addition, the United States Food and Drug Administration has agreed to review the company’s drug candidate for a biolicense application. With the outcome likely by May 2023, there is a potential catalyst for IBRX shares.

ImmunityBio reported cash and cash equivalents of $83 million for the second quarter of 2022. With an extensive research pipeline, funding is likely in the coming quarters. If the company is successful in raising additional funds, I would expect the stock to tend to rise even after discounting the dilution factor.


A close up of a hand holding a variety of pills

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FibroGen (NASDAQ:FGEN) is another unknown biotech stock that looks poised for a big rally. The biotech company already has a drug on the market that is generating revenue. Moreover, there is a large pipeline of candidates that make the stock promising.

For the second quarter of 2022, FibroGen recorded revenue growth of 22% on an annual basis to $29.8 million. Roxadustat (for chronic kidney disease) performed strongly in China. The drug continues to be approved in several countries, which will support revenue growth.

Of note, frontline data for four pipeline candidates (Phase 3) is expected in 2023. This is a major catalyst for the FGEN stock. From a financial perspective, FibroGen reported cash and cash equivalents of $517.6 million in the second quarter of 2022. Additionally, the company expects to end 2022 with a cash balance of $330-360 million. The cash cushion is expected to fund research and development for much of 2023.

Therapeutic Heron

Colorful tablets and vials sitting on a table representing VTGN stock

Source: Bukhta Yurii /

Therapeutic Heron (NASDAQ:HRTX) is another commercial-stage biotech small-cap stock that looks promising. With near-40% near-term interest, HRTX is also worth keeping on the radar for a big near-term rally.

In September 2022, Heron received US FDA approval for a postoperative agent to treat nausea and vomiting. This is the company’s fourth FDA drug approval.

For the first half of 2022, the company reported revenue of $51.1 million. For the same period, net losses widened to $120.2 million. However, this is not a problem considering that Heron is still at an early stage of growth.

It’s also worth noting that the company raised $76.5 million in a private offering last month. With a total cash reserve of $158.7 million, the company has a cash trail through 2024.

Overall, HRTX looks like a good investment opportunity. If revenue growth accelerates in 2023 with more products released, inventory should increase.

Greed Biosciences

Various graphical representations of medical imaging are shown in front of a doctor using a tablet.  DNA stock

Source: Shutterstock / PopTika

With more research and development focused on RNA-based therapies, Greed Biosciences (NASDAQ:RNA) looks attractive. I believe that RNA stock is one of the hidden gems that can offer multiple returns in the long run.

The company has a strong pipeline with phase one and two trials for AOC 1001 underway. A preliminary assessment is also likely in the fourth quarter of 2022. It should be noted that the FDA has already granted orphan and fast-track designation to the drug candidate.

Additionally, trials for two other muscle disorder candidates are expected to begin toward the end of 2022. As a result, there are potential catalysts that can drive the stock higher in the coming quarters. If the initial data is promising, it will set the stage for a meaningful rally.

Avidity ended the second quarter of 2022 with cash and cash equivalents of $398.2 million. For the second quarter of 2022, the company incurred $39.8 million in R&D expenses. Even if the high level of investments continues, Avidity appears to be fully funded for the next 12-18 months. The risk of short-term dilution is therefore low.

Sana Biotechnologies

An image of cells under a microscope

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Sana Biotechnologies (NASDAQ:SANA) has high short interest and I think the biotech stock is poised for a near-term rally.

In summary, the biotech company is focused on developing engineered cells for various medical conditions. Society believes that almost all disease is caused by cell damage or malfunction. Therefore, the potential market is vast with potential drugs covering a wide range of medical conditions.

It should be noted that the company’s drug candidates are still in the preclinical stage. Sana plans to file INDs for two drug candidates later this year. The company also plans to file “INDs on multiple platforms with multiple pharmaceuticals in 2022 and 2023.” SANA stock is expected to remain in the spotlight.

Sana Biotechnologies has a cash reserve of $579.6 million in the second quarter of 2022. The robust cash reserve will allow the company to accelerate its pipeline over the next few years.

Therapeutic relay

A variety of pills, pill bottles and droppers arranged on a table in several bright colors.

Source: Shutterstock

I would also add Therapeutic relay (NASDAQ:RLAY) to the list of unknown biotech stocks with upside potential.

After a recent surge, RLAY stock has corrected, with the company announcing a $300 million stock offering. The dilution correction seems like a good time to consider new exposure to the stock.

In terms of good news, Relay reported positive data for the Phase 1/2 study for the treatment of RLY-4008 bile duct cancer. Early results exceeded the company’s optimistic expectations. With the stock offering, the company is positioning itself for the next stages of testing and deepening the product pipeline.

As of the second quarter of 2022, the company had reported $60.5 million in research and development expenses. This implies an annualized expenditure of $250 million. Relay already has five discovery programs, three of which are targeted towards oncology. Two others relate to genetic diseases.

With cash and cash equivalents of $838 million in the second quarter of 2022, the company has a runway through 2025. The recent stock offering will also increase the cash reserve.

As of the date of publication, Faisal Humayun does not hold (either directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to publishing guidelines.

Faisal Humayun is a senior research analyst with 12 years of experience in credit research, equity research and financial modeling. Faisal is the author of over 1,500 stock-specific articles focused on the technology, energy and materials sectors.


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