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In an unpredictable economy, it is never a good idea to have too many speculative stocks in your portfolio. You want a balanced number of cyclical and secular stocks, and you want to prepare yourself for what the market might face. The remainder of 2012 could be very volatile. In some ways, it seems as though the looming fiscal cliff drama is priced into the market. Yet, looking back at 2011, it seems clear that a political mess could push the market significantly lower. Accordingly, I am looking at a few speculative stocks that might be worth your attention, right now at current valuations, and could provide a bright spot to your portfolio. Each of these stocks carries an elevated level of risk, the reason for their current valuations, while still presenting significant upside with solid clinical data or increased sales, depending on the company. Interested investors should perform significant research into which, if any, of these speculative plays they are interested in and already have an exit plan in place if they do open a position.

Sarepta Therapeutics (NASDAQ:SRPT) has rallied almost 200% in the last three months, and it has deserved every bit of its rally. The stock posted a one-day gain of 200% back on October 3 after clinical results from its Muscular Dystrophy drug created a strong sense of optimism. The company's drug had met its primary goal as patients walked 292 feet further after taking the drug, compared to placebo. The drug, eteplirsen, also restored a key protein that was lacking in some patients with the disease. These results give patients with the disease hope, and analysts project that peak sales could exceed $600 million.

Since October 3, shares of Sarepta have fallen from a high of $45.00 to $26.50. However, the stock had fallen below $22.00 on October 31, but has since rallied to its current price, just under $26. The company is valued at $670 million, which is near equal to its peak projected sales. Most believe that its lead product will be awarded an FDA approval, and it appears as though the stock is in rally mode despite heavy selling pressure in the market. As a result, this speculative stock might be a clear buy as we progress to the end of the year as analyst upgrades could follow.

To suggest any upside or to speak positively of Peregrine Pharmaceuticals (NASDAQ:PPHM) may do more harm than good; however, the truth is that PPHM is showing strong support at $0.70. This is a company that was valued at more than $550 million back in September, but is now trading with a market cap of just $75 million.

Most are aware of the story surrounding Peregrine: The company had traded higher in 2012 after positive data for its lead product, bavituximab, but then fell hard after announcing "major discrepancies" in treatment group coding by an independent third-party vendor and was then forced to default on a $16 million loan. Despite these problems, the stock has since found support and may be worth a look. Keep in mind: This is a product being treated on patients who have failed first-line non-small cell lung cancer. And although the results are questionable, it had a median overall survival of 12.1 months compared to 5.6 months for the control group.

The company's previously reported 12.1 month median survival is a strong advantage over standard-of-care, and considerably better than the two-month benefit for patients using Avastin. With this in mind, the question emerges whether or not the "discrepancy" means that the product is ineffective. Even if the "discrepancy" means that its product is only half as good as previously reported, it still trumps standard-of-care. This is definitely a high-risk investment; but with a $75 million market cap, it is priced for a worst-case scenario, and could present significant upside with minimum downside.

OncoSec Medical (OTCQB:ONCS) is a very small company that you many have never heard of, but one that has great upside potential. The company has more than doubled in the last six months and is currently trading near its support level at $0.30, as volume has increased in intensity over the last two months.

The medical device company recently announced data for two separate trials during the last two months. During this period, it has rallied by more than 50%. Both sets of data have been very encouraging; yet last week the company announced its most significant data from its metastatic melanoma trial. On Wednesday, the stock rallied more than 20% as the company met its end point and announced positive interim efficacy results. But on Wednesday, it fell until finding support, a loss of 14%, when details of the data were released. The selloff appeared to be a "sell on news" type of event for what appeared to be solid data that will probably help the platform progress a step closer to regulatory approval in the U.S.

The company's data showed that 95% of all treated tumors demonstrated response to the company's ImmunoPulse therapy; however, the data was based on just over 50% of the patients who were enrolled when the study began. The good news is that with this data, and data from its Merkel cell carcinoma trial in October, the company has a technology that is being proven effective in several areas of treatment. The company is very diversified with a platform that could potentially address multiple types of solid tumor cancers. Although this treatment is a play in immunotherapy, the company also uses the same administration technology with a chemotherapy approach (NeoPulse), which has also proven to be very effective. Then, when you incorporate the fact that its technology can be used with virtually any chemotherapy or immunotherapy agent to decrease side effects and increase uptake, this is a company that could see immense profits with very little costs using previously approved cancer treatment agents.

Overall, this is one of the best under-the-radar stories of success in biotechnology. But judging by its increase in volume and its price action, people are starting to take notice. Looking ahead into the next few months, the stock should appreciate to a large degree, as more data will be announced. Don't be surprised if the stock rallies in the coming week now that it has found support. This stock could have doubled after its data, and I have no doubt that it will in the coming months. As with the other microcap companies in this article, investors should consider the risks, as this is a development-phase company that is not yet generating revenue and still being traded on the Over-The-Counter Bulletin Board exchange.

If I were to take a poll of investors, and asked the question, "What is the most disappointing biotech stock of the last five years?" most would resoundingly say, "Dendreon Corporation." Dendreon (NASDAQ:DNDN) was supposed to break barriers; it was supposed to change the landscape for treatments in oncology, and lead us into a new era of treatments in oncology. But instead, since reaching a high over $54.00 in 2010, the stock has been on a steady downtrend to its current price of $4.00.

There have been countless problems with Dendreon, but just to name a few: Investors did not anticipate high manufacturing and logistical costs, problems with reimbursements to physicians, and slower than expected sales growth. The company is now going through organizational changes, after closing its New Jersey facilities and laying off employees to cut costs. Although the company's plan appears to be working, as it managed to grow sales by more than 20% in its recent quarter while posting a lower-than-expected loss.

The company is still operating at a loss, but recently gained additional coverage from Aetna and is in the middle of a trial that could create additional indications for the drug. With that being said, Dendreon appears to have found support at its current level, trading flat for the last month while the NASDAQ has lost 7.50% of its value. Much like Peregrine, this is a very risky investment; the company has a large amount of debt and is soon to face increased competition. Yet due to its valuation/potential ratio, I believe the stock could make a good investment over the next several months.

Source: 4 Speculative Investments You Might Want To Consider