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Neoprobe (NEOP): I had recommended Neoprobe back in June. Since then I have bought and sold the stock on several occasions, and although I still find it to have a great chance at success, I have not reinitiated a position in the stock since the middle of July. While the stock fell all the way to $1.60, I regret not getting in around there, as it has since rebounded to $2.70. Neoprobe's main drug is Lymphoseek, and the company filed a new drug application, or NDA, for it on August 10th. The stock has been clobbered for a variety of reasons since reaching a high near $5.50 in May. The initial reason for share price weakness was an attack from a hedge fund manager who was short the stock. The manager cited the "small market" that Lymphoseek is attempting to enter, and questioned the validity of the trials. The Lymphoseek trials, in which Lymphoseek was compared solely with blue-dye, were guided by the FDA, and compared their potential drug with the only FDA approved drug for SLNB procedures. Since those trials were conducted, Sulphur Colloid, which is commonly used in collaboration with blue-dye, has been approved for SLNB procedures for breast cancer. The stock initially endured yet another steep sell-off, though the FDA approval has actually strengthened NEOP's case as the Colloid too was only compared with blue-dye. Now that the NDA has been filed, the company is awaiting news within the next month or two. Acceptance of the NDA will dispel most of the worries regarding the trial setup, and should propel the stock upward.

Talon Therapeutics (OTC:TLON): Talon is off big time since its $1.62 high earlier this year, as it is currently at $.73. Talon's main pipeline drug is Marqibo, which is an Optisome encapsulated formulation, and is supposed to be a much needed improvement over the current chemotherapy, Vincristine. The company filed an NDA on July 18th, after an unexpected delay announced at the end June. Talon plans to enter several different markets with Marqibo, but the NDA is asking for acceptance with the adult acute lymphoblastic leukemia (ALL) label. With the ALL label only, estimates have called for the potential of $100 million in sales. If Marqibo has some success, and gains the label for several other desired indications, there is the potential for a $5 billion market. Keep in mind Talon is attempting to achieve approval with only two trials. Additionally, Marqibo was granted orphan status, and Talon is hoping for accelerated approval. Best of all, Warburg Pincus, a major investment company with significant experience in the biotech industry, made a $100 million investment in Talon. The deal also calls for the potential of further financing for Talon.

Disclosure: Author has no positions in neither NEOP nor TLON, but may initiate a position within the next several months, not including the next 72 hours.

Disclaimer: Investing in Biotechnology stocks, especially those of small, speculative companies, is inherently risky and requires significant due diligence.

Source: 2 Beaten Down Biotech Stocks With the Potential to Quadruple Your Money