Top 5 Small-cap Biotech Stocks of 2025

1. Tiziana Life Sciences (NASDAQ:TLSA)

Year-to-date gain: 227.8 percent
Market cap: US$256.36 million
Share price: US$2.26

Tiziana Life Sciences is a clinical-stage biopharma which is developing therapies for autoimmune and inflammatory diseases, degenerative diseases, and cancer-related to the liver. Its pipeline of candidates is built on its patent drug delivery technology that provides a possible alternative to intravenous delivery.

Tiziana’s lead candidate is intranasal foralumab, a fully human anti-CD3 monoclonal antibody.

Tiziana Life Sciences shares hit US$1.69 on March 7 after the company filed an investigational new drug application with the US Food and Drug Administration (FDA) for a Phase 2 clinical trial in amyotrophic lateral sclerosis (ALS), which is supported by the ALS Association. However, by early April it had fallen back to US$0.78 per share.

Positive news flow later in the spring gave Tiziana shares another boost. In April, John Hopkins University and the University of Massachusetts commenced dosing of the biotech company's intranasal foralumab in Phase 2 trials for patients with non-active secondary progressive multiple sclerosis. On May 7, the company shared positive results from the use of its lead candidate in improving the quality of life for patients with that form of multiple sclerosis.

Tiziana is also studying the use of intranasal foralumab for treating moderate Alzheimer’s disease. On May 9, it announced that PET scans of a patient with moderate Alzheimer's showed a significant reduction in microglia activation associated with neuroinflammation after three months of treatment.

Shares of Tiziana reached US$1.62 on May 13. On July 21, the company announced an "unexpected discovery" following immunologic analysis of the patient with Alzheimer's disease:

"In an unexpected discovery, the analysis revealed an increase in phagocytosis markers in classical monocytes, suggesting that nasal foralumab may enhance their ability to clear amyloid plaques. This unexpected effect may open new avenues for treating Alzheimer’s Disease by targeting both inflammation and amyloid accumulation."

Tiziana shares climbed through the remainder of the month, hitting a year-to-date high of US$2.50 on July 31.

2. Palvella Therapeutics (NASDAQ:PVLA)

Year-to-date gain: 224.98 percent
Market cap: US$416.08 million
Share price: US$37.64

Palvella Therapeutics is a clinical-stage biopharma developing treatments targeting rare genetic skin diseases for which there are no FDA-approved therapies. Its pipeline centers on its patented QTORIN platform, which has an initial focus on rare genetic skin diseases. Its lead product candidate, QTORIN rapamycin, is currently in a Phase 2 clinical trial in cutaneous venous malformations, and a Phase 3 clinical trial in microcystic lymphatic malformations (LM).

QTORIN rapamycin has been granted breakthrough therapy designation, orphan drug designation and fast-track designation from the FDA for the treatment of microcystic LMs.

After starting the year at US$12, shares of Palvella had surged to US$20.99 by February 18. About a week earlier, the company had shared plans to expand the Phase 3 trial to include pediatric patients from three to five years of age. That momentum in Palvella's share price continued to rally to US$29 per share on March 13.

June produced a number of significant milestones for Palvella. On June 9, the company received initial proceeds from a grant issued by the FDA Office of Orphan Products Development for its Phase 3 trial, and on June 23, it completed enrollment for the trial with 51 subjects, 25 percent over its target.

The company closed out the month with news that it had been added to the broad-market Russell 3000 Index (INDEXRUSSELL:RUA) and the Russell 2000 Index (INDEXRUSSELL:RUT).

The company said it remains on track to deliver top-line Phase 3 data in Q1 2026 to support its planned new drug application submission later that year. While the company didn't release news in July, its share price climbed significantly through the month to hit a year-to-date high of US$39.87 on July 28.

3. OKYO Pharma (NASDAQ:OKYO)

Year-to-date gain: 163.03 percent
Market cap: US$117.35 million
Share price: US$3.13

OKYO Pharma is a clinical-stage biopharma developing therapies for the treatment of neuropathic corneal pain and dry eye disease. Its lead candidate is urcosimod, a non-steroidal anti-inflammatory and non-opioid analgesic.

So far in 2025, the company has achieved multiple milestones related to its Phase 2 trial of urcosimod for treatment of neuropathic corneal pain. On April 30, OKYO announced plans to end the trial early to analyze the data from the patients who had completed the trial, with the goal of accelerating its clinical development and expanding the program.

Supporting the decision was the fact that urcosimod had previously demonstrated safety in OKYO's completed Phase 2 trial of the candidate to treat patients with dry eye disease.

The next day, news broke that the FDA granted urcosimod fast-track designation for the treatment of neuropathic corneal pain. OKYO's stock price reached US$1.57 on May 1.

On July 17, OKYO posted strong top-line data from its Phase 2 clinical trial, and stated it is planning a meeting with the FDA to discuss next steps for its lead drug candidate. The following day, OKYO received US$1.9 million in non-dilutive funding to support its clinical development of urcosimod.

Shares of OKYO hit a year-to-date high of US$3.17 on August 5.

4. IO Biotech (NASDAQ:IOBT)

Year-to-date gain: 129.47 percent
Market cap: US$144.28 million
Share price: US$2.16

IO Biotech is developing immune-modulating therapeutic cancer vaccines based on its T-win technology platform, designed to activate T cells to target both tumor cells and the immune-suppressive cells.

The clinical-stage biopharmaceutical company's lead cancer vaccine candidate, IO102-IO103, which has the brand name Cylembio, is currently in clinical trials. IO102-IO103 has breakthrough therapy designation from the FDA when used in combination with Merck's (NYSE:MRK) anti-PD-1 therapy KEYTRUDA for the treatment of advanced melanoma based on positive Phase 1/2 first line metastatic melanoma data.

At the start of the year, IO Biotech completed enrollment in its Phase 2 trial of IO102-IO103 with KEYTRUDA as a treatment given before and after surgery for resectable melanoma or head and neck cancer.

On February 4, the company published results from a preclinical study of its second immune-modulatory therapeutic cancer vaccine candidate, IO112, targeting arginase 1, which plays a key role in immune suppression.

In mid-March, IO Biotech was named to Fast Company’s list of the world’s most innovative companies of 2025.

The following month, the company presented new preclinical data for its lead candidate IO102-IO103, as well as IO170, which targets transforming growth factor beta. In its Q1 financial results and business highlights, released on May 14, IO Biotech shared that a readout of primary endpoint data from its pivotal Phase 3 trial of its lead investigational therapeutic cancer vaccine in patients with advanced melanoma is expected in the third quarter of 2025.

Shares of IO Biotech reached a year-to-date high of US$2.40 on July 28.

5. Spero Therapeutics (NASDAQ:SPRO)

Year-to-date gain: 110.95 percent
Market cap: US$124.12 million
Share price: US$2.22

Spero Therapeutics is developing novel treatments for rare diseases and multi-drug resistant bacterial infections with high unmet need. The company’s lead drug candidate is tebipenem pivoxil hydrobromide (HBr), a late-stage development asset developed in collaboration with pharma giant GSK (NYSE:GSK).

HBr is used to treat complicated urinary tract infections (cUTIs), including pyelonephritis. Spero has an exclusive license agreement with GSK for the development and commercialization of the drug candidate in all ex-Asia markets. The FDA has granted tebipenem HBr qualified infectious disease product and fast-track designations.

Shares of Spero traded below US$1 for much of the first half of 2025. However, the stock surged 245 percent on May 28 to reach US$2.35 after Spero reported that its Phase 3 trial evaluating tebipenem HBr for treating cUTIs met its primary endpoint and stopped early for efficacy. GSK plans to include the findings in a filing to the FDA during H2.

Spero shares reached a year-to-date high of US$3.04 on July 9.