3 Tiny Biotech Stocks That I'm Paying Attention to in 2015

The fact that biotech stocks can trade up or down significantly based on news from clinical research trials ensures there is no shortage of pop-and-drop stories in this business. The industry's volatility might scare off many investors, but for those willing to accept the risk, here are three tiny biotech stocks that could make big moves thanks to the release of trial data in 2015.

No. 1: Achillion PharmaceuticalsAchillion has released a steady stream of positive news since November, and those releases could move the stock in the coming months.

Achillion is developing ACH-3102, an NS5A-inhibiting drug that when paired up with Gilead Sciences'blockbuster drug Sovaldi is showing remarkable efficacy with ever-shortening treatment duration for hepatitis C. In November, Achillion reported that combining ACH-3102 with Sovaldi provided a functional cure in eight weeks for every patient in its trial. In February, the ACH-3102 plus Sovaldi combo was found in a trial to cure every patient in six weeks. Now Achillion is studying whether the combination can cure hepatitis C after just four weeks of treatment. If that four-week trial pans out, it could be a major breakthrough given that the shortest currently approved treatment regimen is Gilead's Harvoni, which can be used for eight weeks in about 45% of people with the genotype 1 variation of hepatitis C.

Source: Achillion Pharmaceuticals.

No. 2: NeuralstemNeuralstem is developing next-generation treatments for diseases of the central nervous system, and the company's stem cell and small molecule drugs target diseases with large unmet needs, including ALS.

The company's NSI-566 completed its phase 2 trials as a therapy for ALS last July; results are expected to be released soon. If NSI-566 proves effective, it could mark a significant advance for the 5,600 patients who are diagnosed with ALS every year. There are no approved treatment options currently, so industry watchers will be carefully observing this drug's clinical performance.

Source: Neuralstem.

No. 3: Prothena Corp. plc Prothena, which was spun out of Elan plcin 2012, is working on antibodies that could be used to treat diseases that involve protein misfolding or cell adhesion.

One of the company's most intriguing drugs is PRX002, an immunotherapy that is in phase 1 trials as a treatment for Parkinson's disease. Results from a single ascending dose phase 1 trial should be released in the first half of this year; if those results are encouraging, it could create a lot of excitement.

Parkinson's disease is the second-most-common neurodegenerative disease, and current treatments only address the early symptoms of the disease, rather than the affliction itself. Globally, between 7 million and 10 million people have been diagnosed with the disease, including up to 1 million people in the United States. Given the size of the patient population and the lack of treatment alternatives, Roche Holding AGagreed to potentially pay Prothena as much as $600 million in research and commercial milestones, as well as a 30% royalty on any future U.S. sales, to license the drug.

Source: Prothena Corp. plc.

Tying it togetherAll three of these companies are intriguing because they are studying drugs that could address significant patient populations. However, all three are also clinical stage companies, which means none of them has yet successfully ushered a drug through trials and FDA approval to commercialization. Since 90% of drugs that enter clinical trials end up in the waste bin, rather than on the market, the odds are stacked against these players. Still, strong trial results could send these companies' shares higher, which could be worth the risk to some daring investors.

The article 3 Tiny Biotech Stocks That I'm Paying Attention to in 2015 originally appeared on Fool.com.

Todd Campbell owns shares of Gilead Sciences and Achillion. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may or may not have positions in the companies mentioned. The Motley Fool recommends Gilead Sciences. The Motley Fool owns shares of Gilead Sciences. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.