Over the past decade and a half, biotech stocks have created enormous wealth for investors. Some of the large-cap stocks have already reached dizzying heights. Now, investors are starting to look at some of the smaller-cap biotech stocks.

Those companies could be on their way to attaining large-cap status. Obviously, if it happens, corporate growth of that scale could be a key catalyst. On that note, here is a look at 3 smaller-cap biotech stocks that should be on the watch lists of investors.

Biotech Stocks to Watch #1 PharmaCyte Biotech (PMCB)

One of the keys to early-stage biotech stocks has come in the form of positive phase trials and/or a clear path to attain regulatory approvals of any kind. PharmaCyte Biotech (PMCB) focuses on ways to effectively deliver treatments to patients with diseases ranging from cancer to diabetes.

The company’s proprietary cellulose-based live-cell encapsulation technology known as “Cell-in-a-Box®is the platform that the company uses to develop its therapy delivery methods. For most of the quarter, shares of PMCB stock have traded between $0.033 and $0.04 with volume recently surging.

[BREAKING NEWS] PharmaCyte Biotech (PMCB) Releases Shareholder Update Call Playback Information

PharmaCyte’s submission of an IND application is what has its shareholder’s attention, but it’s what an FDA approval of that application could mean for PharmaCyte (PMCB) that could garner the most attention. Once the FDA has approved the company’s IND application for Cell-in-a-Box® + low doses of ifosfamide to treat LAPC, the FDA’s approval will essentially permit PharmaCyte to open clinical activities throughout the country.

On September 19, PharmaCyte saw more than 6 million shares trade; well above its daily average. That trend has continued during the days to follow. Most of the attention surrounding the company has been on two things. First, its progress with Cell-In-A-Box and the application for Pancreatic cancer has continued to progress.

The company brought on Dr. Manuel Hidalgo, has confirmed that he will be Principal Investigator (PI) for PharmaCyte’s planned clinical trial in locally advanced, inoperable pancreatic cancer (LAPC) now that he is at Weill Cornell Medical Center.

Biotech Stocks to Watch #2 Cytokinetics (CYTK)

The first such stock to consider is that of Cytokinetics, Inc. (CYTK Stock Report). The stock has been one of the best performers this year, having rallied by as much as 105% so far. The company is involved in popularizing the use of muscle activators in order to help muscle functioning in certain patients.

Over the course of the last five days, the stock rallied again after the data from one of its products CK-274 was presented at an important event. This belonged to the Phase 1 study and now the company has permission to go ahead with Phase 2 of the clinical tests.

Although the company does have a competitor in the form of MyoKardia, it is necessary to point out that Cytokinetics’ product needs a shallower dosage and offers a shorter half-life.

Biotech Stocks to Watch #3 DURECT Corporation (DRRX)

The other stock to watch isDURECT Corporation (DRRX Stock Report). It’s an interesting play due to the work done by the company. The company’s product DUR-928, a gene expression modifier treats non-alcoholic steatohepatitis (NASH).

Considering the fact that as many as 20 million Americans suffer from the condition, there is a huge market to be cornered. In addition, an analyst has initiated coverage in the Durect stock due to the possibilities of the DUR-928 product.

He has stated that in addition to NASH, it could also work as a treatment for alcoholic hepatitis. That being said there is still a long way to go before the true effectiveness of this medicine can be gauged. The stock has soared 230% over the past couple of months.