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To bring about improvements in the quality of people's lives and to help prolong and save those lives after many years of trials and investment - that is the beauty of biotech companies. The two biotech companies that are featured in this article work in the field of oncology (cancer). Both companies are small-cap stocks with the potential to move dramatically in either direction in short periods of time. These companies are facing FDA approval decisions within the next few months. Binary events such as this can cause large gains or losses depending on the outcome, therefore they are not for the conservative investor.

AVEO Pharmaceuticals (AVEO) has an FDA panel review date on May 2, 2013 with an FDA decision date on July 28, 2013, for Tivozanib with an indication for advanced renal cell carcinoma. This condition is the most common type of kidney cancer in adults, responsible for about 80% of cases. Aveo is a cancer therapeutics company committed to developing drugs to have a positive impact in patient's lives. Tivozanib had positive results from Phase 3 trials as outlined in Dr. Robert Schwartz's article. Dr. Schwartz feels strongly and makes a strong case that Tivozanib will be approved by the FDA.

Aveo also has a drug in clinical development known as Ficlatuzumab. The company announced results of a Phase 2 study last year regarding this drug. The study demonstrated that the addition of ficlatuzumab to getfitinib may be effective in a select subset of patients. The study showed that inhibiting the HGF ligand might be important in the treatment of cancer. However, the primary endpoint of the study (overall response rate) was not met. The drug is now undergoing a Phase 2 trial for non-small cell lung cancer.

The company also has a compound known as AV-203, which is undergoing a Phase 1 study examining the safety and efficacy in patients with advanced solid tumors.

There are 9 analysts covering AVEO who have an average target price of $11.30, up from the current price of $7.74. This one-year target appears to have an approval for Tivozanib priced in.

Delcath Systems, Inc. (DCTH) has an FDA approval date on June 15, 2013 for Chemosat with melphalan hydrochloride for the treatment of metastatic melanoma in the liver. This is now known as the Melblez Kit system. The company is focused on chemosaturation of the liver, which delivers high-dose chemotherapy to the liver. There are currently no approved or effective treatment options for ocular melanoma metastatic to the liver. Therefore, the company has the potential to provide the only treatment for this disease if FDA approval is granted.

The company has already obtained CE Mark approval in 2012 for marketing the product in Europe. Delcath is focused on marketing in the following countries: Germany, United Kingdom, Italy, the Netherlands, France, Spain, and Ireland. Obtaining an expansion of reimbursements for the Chemosat procedure is key to drive revenue in Europe.

Delcath is also working to line up strategic partners for the development of Chemosat in China. The company obtained CE Mark approval for the Chemosat delivery system for doxorubicin. China is a large market for this as the country has a large majority of the world's liver cancer patients.

The five analysts covering Delcath have an average one-year price target of $3.63, up from the current price of $1.69.

Conclusion:

It is important to note that both of these companies have a lot riding on the approval of their pending products. Neither of them have any FDA approved products for marketing in the U.S. This makes them high-risk stocks and subject to high volatility. However, if FDA approval is granted, these companies have solid potential for growth. Due to the high-risk, I would only recommend using a small portion of your portfolio to invest in them.

Source: 2 Cancer Biotechs With Upcoming FDA Approval Decisions In 2013