If you're looking to diversify your portfolio with small-cap ASX healthcare stocks that have significant growth potential, here are three companies to consider. Small-cap stocks can offer impressive gains, but they also come with higher risks, so it's crucial to evaluate each opportunity carefully.
1. Botanix Pharmaceuticals Ltd (ASX: BOT)
Botanix Pharmaceuticals has emerged as a promising small-cap healthcare stock with strong growth potential. The company's recent FDA approval of its Sofdra topical gel is a significant milestone. This gel is designed to treat primary axillary hyperhidrosis, a condition characterised by excessive underarm sweating. While the product has been available in Japan, the U.S. market represents a much larger opportunity.
According to Tom Bleakley from BW Equities, the FDA approval is expected to enhance Botanix's revenue outlook significantly. The company estimates that about 10 million people in the U.S. suffer from excessive sweating, presenting a substantial market for Sofdra.
Over the past year, Botanix Pharmaceuticals' share price has surged by 100%, closing at 36 cents a share recently. The company also completed a successful institutional placement in June, raising $70 million. As of June 30, Botanix had a robust cash position of $79.3 million with no debt, indicating a strong financial foundation for future growth.
2. OncoSil Medical Ltd (ASX: OSL)
OncoSil Medical is another compelling small-cap healthcare stock with significant upside potential. The company has made considerable strides in the oncology field with its OncoSil™ device, designed for treating locally advanced unresectable pancreatic cancer in combination with chemotherapy. The device has received breakthrough designations in the European Union, United Kingdom, and the United States, and it has already been granted CE Marking for marketing in Europe.
OncoSil Medical’s device is currently approved for sale in over 30 countries, including the EU, UK, Türkiye, and Israel. Initial commercial treatments have commenced in Spain, Italy, Greece, Türkiye and Israel.
Recently, OncoSil Medical’s stock has seen a 9.09% increase, reflecting positive market sentiment and investor confidence in its innovative technology and growth prospects. Analysts highlight the company’s potential to boom anytime.
3. Opthea Ltd (ASX: OPT)
Opthea Ltd. is another small-cap healthcare stock with strong potential, particularly for investors looking at companies involved in advanced treatments for eye diseases. Opthea is developing a new drug for macular degeneration, the leading cause of blindness among people aged 50 and older. The company's progress through the FDA's phase 3 clinical trials will be crucial, with results expected in the June quarter of 2025.
Medallion Financial Group's Philippe Bui highlights Opthea's potential, noting that successful trial results could significantly boost the company's share price. The company has recently completed a capital raising at 40 cents a share, strengthening its financial position.
As of June 30, Opthea reported a cash balance of US$172.4 million, up from US$101.6 million in the prior quarter. This solid financial footing is expected to support its continued development and clinical trials. Over the past year, Opthea's share price has increased by 32%, closing at 54 cents a share recently.
These three small-cap ASX healthcare stocks—Botanix Pharmaceuticals, OncoSil Medical, and Opthea Ltd—each offer unique growth opportunities. Botanix’s recent FDA approval, OncoSil Medical’s progress with its OncoSil™ device, and Opthea’s advancing clinical trials all position these companies for potential success. As with any investment, thorough research and consideration of the associated risks are essential.
