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Small-cap stocks are listed companies having market capitalisation in a range of $300 million to ~$2 billion. Small-cap companies can offer investor more opportunity for growth and the significant benefit of investing in small-cap companies is to beat institutional investors. The benefits of investing in small-cap stocks are:
ü Growth potential- Small-cap stocks show a significantly higher growth potential as compared to the more prominent companies. What makes small-cap stock an attractive option for investors is a larger room for future growth compared to large-cap companies.
ü Market inefficiencies- The information about the small-cap stocks is not available easily as compared to mid and large-cap stocks leaving small-cap stocks with a high probability of improper pricing. This generates enormous opportunities for investors to leverage the inefficiencies in the pricing and make a high return on their investments.
ü Less involvement of financial institution in investing in small-cap stocks- Financial institutions as well as mutual and hedge funds must comply with certain regulations that do not allow them to invest heavily in small-cap stocks.
With the benefits, there are some disadvantages of investing in small-cap stocks-
ü High risk;
ü Less liquidity;
ü Investing in small caps could be a time-consuming activity.
In this article, we are highlighting four small-cap health care stocks-
Volpara Health Technologies Limited (ASX:VHT)
A MedTech SaaS company Volpara Health Technologies Limited (ASX:VHT) was founded in 2009 and is engaged in providing clinical applications to screening clinics provide feedback on breast density, compression, dose and quality. A total 38 countries have been using the technology and services provided by Volpara, and these technologies are supported by several regulatory clearances, patents and trademarks, including Food and Drug Administration (FDA) clearance and CE marking.
Volpara’s December Newsletter highlights-
On 18 December 2019, the company updated the market with its December newsletter. The key highlights from its newsletter are-
RSNA Show Positive for Volpara- VHT had received a record number of sales leads after a positive reception of its new full suite of breast screening products at the radiology industry’s key event, the annual meeting of the Radiological Society of North America (RSNA) meeting in Chicago.
At the RSNA meeting, the company displayed Aspen™, which is a software for breast reporting and tracking and is designed to streamline workflow, support personalised care and for optimising the facility operations.
Publication of DENSE Results- The publication of the positive DENSE trial results in November in the New England Journal of Medicine is a landmark for breast cancer care. The DENSE trial involved over 40,000 women in the Netherlands, and it was the first randomised controlled trial on the clinical utility for the supplemental screening of breast MRI for women with very dense breasts.
Stock information-
On 27 December 2019, the stock of VHT last traded at $1.82, moving up by 1.393% from its last close, with outstanding market shares of approximately 218.06 million. The company had a market capitalisation of nearly $391.42 million, while the 52 weeks low and high price of the stock was noted at $0.924 and $2.170, respectively.
Opthea Limited (ASX:OPT)
An ASX listed biologics drug developer Opthea Limited (ASX:OPT) is engaged in providing therapies for ophthalmic diseases. The company has exclusive rights for a considerable intellectual property (IP) portfolio over Vascular endothelial growth factor receptor 3 (VEGFR-3), Vascular endothelial growth factors C & D (VEGF-C, VEGF-D). The company is developing OPT-302 for use in combination with VEGF-A inhibitors and has reported outcomes from the clinical study, which is multi-centre, double-masked, prospective, sham-controlled, superiority study that enrolled 366 patients with wet Age-related Macular Degeneration (wet AMD).
Source: Company’s Report
Completion of $50 million Institutional Placement-
On 6 December 2019, Opthea confirmed about the completion of the private placement, which was announced on 2 December 2019, raising $50 million through the issue of nearly 18.9 million fully paid ordinary shares (New Shares) at an issue price of $2.65 per New Share. The company confirms that there is no requirement of shareholder approval, and the placement is within its placement capacity under ASX listing rule 7.1.
Stock information-
On 27 December 2019, the stock of OPT last traded at $2.99, moving up by 3.46% compared to its last close, with outstanding market shares of nearly 269.16 million. The company had a market capitalisation of approximately $777.87 million, while the 52 weeks low and high price of the stock was noted at $0.560 and $4.150, respectively.
An Australian health care sector player Alcidion Limited (ASX:ALC) is working to revolutionise the health care industry with smart, intuitive technology solutions to meet the requirements of allied healthcare and hospital across the globe. The company offers several software products which provide a unique contribution to the health care market at the global level.
Alcidion has more than 25 years of experience in health care, and the company brings a combined form of very best market knowledge and technology for offering solutions to make health care better for every individual.
Deal with digital exemplar NHS trust Taunton
On 19 December 2019, the company unveiled that Taunton and Somerset NHS Foundation has selected Alcidion for providing its electronic observations and patient assessment solution- Patientrack. This contract is worth $500K for more than three years.
Stock information-
On 27 December 2019, the stock of ALC last traded at $0.190, moving up by 2.703% from the last closing price, with outstanding market shares of nearly 990.69 million. The company had a market capitalisation of approximately $183.28 million, while the 52 weeks low and high price of the stock was noted at $0.038 and $0.305, respectively.
Paradigm Biopharmaceuticals Limited (ASX:PAR)
An ASX listed Australian biopharmaceutical company Paradigm Biopharmaceuticals Ltd (ASX:PAR) is focused on drug repurposing and for the treatment of inflammation, it provides repurposed pentosan polysulphate sodium (PPS). The company has a strong IP position with many patents and patent applications.
Calendar Year Update-
On 12 December 2019, the company provided a calendar year update for the year end and updated the market with its clinical development programs and business. The key highlights from this update are-
ü Paradigm Biopharmaceuticals met with the Therapeutic Goods Administration on 11 November 2019 for presenting its case for provisional approval of Zilosul® for knee osteoarthritis treatment. The TGA provided valuable guidance, and on the basis of feedback received from the TGA, the company is progressing with the process of provisional determination assessment.
ü Paradigm would meet the US Food and Drug Administration (FDA) in February 2020 for a pre- Investigational New Drug (IND) meeting regarding osteoarthritis program and following this meeting, feedback on phase 3 clinical program to support regulatory approval would be provided.
ü The company anticipates that it would report an updated dataset for the SAS program on ~400 knee osteoarthritis patients in the second quarter of the calendar year 2020.
ü Paradigm is preparing for a combined US Food and Drug Administration and European Medicines Agency (EMA) joint parallel advice application for submission to discuss the MPS Phase 2/3 Clinical Trial in the first quarter of the calendar year 2020 and this meeting would provide for clarification and consensus on the clinical study design to support the US and Europe regulatory approvals.
Stock information-
On 27 December 2019, PAR stock last traded at $2.940, up by 5% versus the last closing price, with outstanding shares of nearly 196.9 million. The company had a market capitalisation of approximately $551.32 million, while the 52 weeks low and high price of the stock was noted at $0.899 and $4.120, respectively. The stock of PAR has delivered 182.47% on year to date basis and 109.74% in last six months.
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