The 2016 Small-Cap Biotech Watchlist Debuts At The Biotech Showcase

"The end story for this name is not for the company to stay as a sole entity." Benjamin added. "In this space, there are big names like Grifols S.A. (GRFS:NASDAQ) and CSL Behring Ltd. (CSL:ASX; CMXHY:OTCPK) looking for differentiated products. If we're right, ADMA is likely a takeout candidate sometime in 2016-2017, especially if the product gets approval."

Benjamin also selected a company that conforms to the "fallen angels" theme.

"We always hear the adage of buy low, sell high, but we tend to, as investors, do the exact opposite. In the biotech space in 2015, there were several big-time failures. Verastem Inc. (VSTM:NASDAQ) saw one of those failures. The stock is trading now well below cash. If it liquidated today, Verastem would be worth more than where the stock is trading. When we see names like that, we see a runway that can last several years, and we see buying opportunities—suddenly the M&A model becomes that much better. It's not just big pharma acquiring smaller biotechs, but other biotechs merging and acquiring technologies. We think cash is a good bet in the long term, and believe we'll see significant shareholder value increase, so Verastem is our fallen angel pick."

Galena Biopharma Inc. (GALE:NASDAQ), which Benjamin noted "has had a rough start to the year," also makes the cut. "That said," the analyst went on, "the company did shore up its balance sheet and is on track to report interim results from the ongoing, >700-patient Phase 3 PRESENT trial in Q2/16. With over $50M in the bank, the company is poised to report whether the Phase 3 trial should continue or stop due to futility. We expect the continuation of the trial to be a meaningful event for the company and shareholders, especially from current levels"

Finally, in the cell therapy space, Benjamin's top small-cap company is Fate Therapeutics Inc. (FATE:NASDAQ).

"This company is making small molecules that can modulate cell therapies—can essentially help them express certain molecules, either increasing or decreasing the expression of checkpoint inhibitors. Fate is working both with partners in the chimeric antigen receptor (CAR) T cell space, as well as in the autoimmune disease space," Benjamin said.

The Approval Process in Action Infographic

Dr. Reni Benjamin is a senior biotechnology analyst at Raymond James. His expertise focuses on companies in the oncology and stem cell sectors. Benjamin has been ranked among the top analysts for recommendation performance and earnings accuracy by StarMine, has been cited in a variety of sources including The Wall Street Journal, Bloomberg Businessweek, Financial Times and Smart Money, and has made appearances on Bloomberg television/radio and CNBC. He authored a chapter in "The Delivery of Regenerative Medicines and Their Impact on Healthcare," has presented at various regional and international conferences, and has been published in peer-reviewed journals. He is a past member of the UAB School of Health Professions' Deans Advisory Board. Prior to joining Raymond James, Benjamin was a managing director and senior biotechnology analyst at H.C. Wainwright, Burrill Securities and Rodman & Renshaw. He was also an associate analyst at Needham and Company. Benjamin earned his doctorate from the University of Alabama at Birmingham in biochemistry and molecular genetics by discovering and characterizing a novel gene implicated in germ cell development. He earned a bachelor's degree in biology from Allegheny College.

Mara Goldstein joined Cantor Fitzgerald & Co. from Thomson Reuters, where she served as director of research for Reuters Insight. Goldstein was initially responsible for the firm's healthcare research practice, and later assumed responsibility for all research activities and sectors. Prior to that, Goldstein was an executive director and senior pharmaceutical analyst at CIBC World Markets. At Cantor, Goldstein covers the biotechnology sector. Goldstein also worked at Alex Brown & Sons and CS First Boston. She holds a bachelor's degree in economics from Purdue University.

Michael G. King Jr. is a managing director and senior biotechnology analyst at JMP Securities. King comes to JMP from Rodman & Renshaw LLC, where he was managing director and senior biotechnology analyst. He has more than 17 years of experience as a leading biotechnology equity research analyst, consistently ranking at the top of Institutional Investor magazine's annual sellside research survey, in addition to being named that publication's "Home Run Hitter" in 2000. King also served as senior vice president of corporate development and communication at ZIOPHARM Oncology (ZIOP:NASDAQ). Prior to joining ZIOPHARM, King was a managing director and senior biotechnology analyst at Wedbush Securities. He holds a bachelor's degree in finance from Baruch College.

Raghuram "Ram" Selvaraju's professional career started at the Geneva-based biotech firm Serono in 2000, where he discovered the first novel protein candidate developed entirely within the company. He subsequently became the youngest recipient of the company's Inventorship Award for Exceptional Innovation and Creativity. Selvaraju started in the securities industry with Rodman & Renshaw as a biotechnology equity research analyst. He was the top-ranked (#1) biotech analyst in The Wall Street Journal's "Best on the Street" survey (2006) and went on to become head of healthcare equity research at Hapoalim Securities, the New York-based broker/dealer subsidiary of Bank Hapoalim B. M., Israel's largest financial services group. While at Hapoalim, Selvaraju was regularly featured in The Wall Street Journal, Barron's, BioWorld Today, and Reuters/AP. He was also a regular guest on the Bloomberg TV program "Taking Stock," appeared with Bloomberg TV's on-air correspondents Betty Liu and Gigi Stone and was a guest on CNBC's "Street Signs with Herb Greenberg."

Dr. George Zavoico, senior equity analyst at JonesTrading Institutional Services LLC, has more than 10 years of experience as a life sciences equity analyst writing research on publicly traded equities. His principal focus is on biotechnology, biopharmaceutical, specialty pharmaceutical, and molecular diagnostics companies. Previously, Zavoico was a senior equity research analyst in the healthcare sector at MLV & Co., and an equity analyst at Cantor Fitzgerald and Westport Capital Markets. Prior to becoming an equity analyst, Zavoico established his own consulting company serving the biotech and pharmaceutical industries, providing competitive intelligence and marketing research, due diligence services and guidance in regulatory affairs. Zavoico began his career as a senior research scientist at Bristol-Myers Squibb Co., moving on to management positions at Alexion Pharmaceuticals Inc. and T Cell Sciences Inc. (now Celldex Therapeutics Inc.). Zavoico has a bachelor's degree in biology from St. Lawrence University and a Ph.D. in physiology from the University of Virginia. He held post-doctoral fellowships at the University of Connecticut School of Medicine and Harvard Medical School/Brigham & Women's Hospital. He has published more than 30 papers in peer-reviewed journals and has coauthored four book chapters. He received The Financial Times/Starmine Award two years in a row for being among the top-ranked earnings estimators in the biotechnology sector.

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