Many small-cap biotechs are dirt-cheap and selling below cash. This is a very difficult time to make money in this sector but for investors willing to hold the opportunities are great. In my subscriber-based newsletter Biotech Insight, I cover the universe of small-cap biotechs.

One group of companies I am currently recommending are those with potentially medical break-through technologies that have value-driving events on a near-term time horizon. For example, Micromet (MITI listed on NASDAQ), a small biotech company headquartered in Germany, had early but spectacular data from a Phase I trial in refractory hard-to-treat lymphomas that was released at ASCO (the big clinical cancer meeting) in June of ’08. They have a novel technology platform that incorporates monoclonal antibodies and activation of the T-cell arm of the immune system. I expect durability data at the upcoming ASH conference in early December. If the responses reported at ASCO are durable this could be a big value-driver. MITI recently raised money in this difficult environment so the financing overhang is gone. I personally own MITI and have it in the online Model Portfolio (viewable only to subscribers).

There are a number of companies in the small-cap space that are undervalued in our current economic climate. In the Biotech Insight online newsletter I give my personal insights that come from practicing medicine for over 30 years, a background in biochemistry (a post-doc in the biochemistry department at Stanford) and my involvement in a number of biotech startups.