There are two inevitables in the business world. The first is that health stocks will always remain in the minds of investors, a fact credited to the overall importance of the health sector. Never will it be one that the market can easily persuade to disappear. Cryptocurrency, on the other hand, is a different story. But that’s not the second inevitable. We’re designating that to the idea that small-cap stocks will always attract interest from investors, as they can offer serious potential. These stocks will, of course, remain risky investments, but at this point, that’s the stock market for you.
2020 is going to bring new adventures and investments. Knowing this, and knowing the two inevitables, we’ve put together a list of three small-cap health stocks forecasted to see upside potential over the new year.
Three Small-Cap Health Stocks to Watch in 2020
1. Cara Therapeutics (NASDAQ:CARA)
Cara Therapeutics is a well-known company. Many even considered it to be one of the most anticipated small-cap stocks in 2019. And that reputation continued, despite the Stamford, Connecticut-based company failing to meets its secondary endpoints in its separate phase 2 trial for its leading drug candidate Korsuva.
CARA stock indeed fell on the market after the news was released, but let’s look at the bigger picture. Korsuva has the potential to become huge in treating pruritus, because, at the moment, no drugs specifically address it. Cara Therapeutics is changing that while also paving its way.
Instead of causing side effects (which most pain drugs that target the central nervous system do), Korsuva focuses on the peripheral nervous system, providing pain relief. Despite the separate phase 2 trial, clinical results have been mostly positive.
In short: missing the secondary endpoints doesn’t seem enough to derail a company that has analysts forecasting that its drug candidate’s peak revenue could hit $570 million per year. Now imagine the market value of Cara Therapeutics if the FDA approves Korsuva.
At the time of writing, CARA stock is trading at $15.05 on the Nasdaq. That puts the small-cap health stock up 0.07%.
2. Portola Pharmaceuticals (NASDAQ:PTLA)
Similar to how there are two inevitables in the business world, one could argue something similar about the health sector. Individuals who are on blood thinners, more often than not, experience uncontrollable bleeding. In 2017, more than 100,000 people visited the hospital because of uncontrollable bleeding. And people are desperate for a drug that can stop it.
Portola Pharmaceuticals is doing precisely that. The company’s leading drug candidate is called Andexxa, and it is an anticoagulant reversal agent. In other words: if patients are taking blood thinners and experience excessive bleeding, they could take Andexxa to reverse this. To top it off, the FDA has already approved Andexxa for commercial production in the United States.
If that doesn’t indicate the possibility of PTLA stock becoming one of the more significant small-cap health stocks in 2020, we don’t know what does.
At the time of writing, PTLA stock is trading down 0.10% on the Nasdaq.
3. NanoString Technologies (NASDAQ:NSTG)
Yes, NanoString Technologies is a small medical technology company that has a market capitalization of around $997 million. And yes, the company did report a net loss of $22.8 million in Q3 2019 but, hear us out!
Most of NanoString’s revenue comes from consumables, and that makes these a recurring source of revenue. Now, imagine the figures the company could start to see when it sells more of its laboratory equipment. If the income grows, so too could the company’s valuation. Don’t you want to be around for that?
At the time of writing, NSTG stock is trading at $28.02 on the Nasdaq. That puts the small-cap health stock up 0.38%.
If you’re looking to get into investing in 2020, remember the names of these small-cap health stocks. There’s no guarantee you will reap any benefits, but we can promise all three companies are doing their part to increase corporate and investor growth. That has to count for something.
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