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If you've ever been to an amusement park you've seen the 'You Must Be 48 Inches Tall to Ride the Following Roller Coaster' signs posted throughout. A similar warning is applicable to the risk certain investors take when diving into micro-cap biopharmaceutical companies. The following three companies pose great risk. Yet given their current pipelines, they pose an even greater reward.

CytRx Corporation (NASDAQ:CYTR): CYTR has one of the more interesting pipelines of products that are currently undergoing clinical trials. The first of its products is INNO-206, a multi-purpose treatment method for both soft tissue sarcomas and solid tumors. Currently INNO-206 is in Phase II trials for the treatment of sarcomas and is in phase I(b)/II for the treatment of solid tumors.

If we examine the fundamentals of CYTR, we'll notice a few important things. Currently, CYTR has a market cap of $57.44 million and an EPS of -$0.11/share. However, the company's CEO has noted upcoming guidance is very positive.

We are on track to report important progress this year with our oncology clinical programs," said President and Chief Executive Officer Steven A. Kriegsman.

ADVENTRX Pharmaceuticals (ANX): ANX considers itself a specialty pharmaceutical company with a focus on emulsion formulations directed toward the containment of both lung and breast cancers. ANX has two very practical products in its pipeline. The first is called Exelbine (ANX-530), which is an emulsion formula for the chemotherapy drug Vinorelbine. Exelbine aims to treat patients with non-small cell lung cancer and non-small cell breast cancer. The second is called ANX-514, which is being designed similar to that of its competitor Taxotere. However, ANX-514 will not contain the toxic components Taxotere does.

In recent news, ANX was upgraded by Vista Partners and given a $3.50/share price target. By examining the numbers a bit closer we find ANX has a market cap of $32.92 million and reported its most recent earnings of -$0.47/share (Q4 '11).

"ANX currently trades at a negative enterprise value with its market cap currently being less than its cash balance. In addition, the cash value per share was approximately $1.06 at 2011 year end, a discount of approximately 71% from the current share price" said Ross Silver of Vista Partners, Ltd.

OXiGene, Inc. (NASDAQ:OXGN): OXGN is a clinical-based biopharmaceutical company located in San Francisco, CA. The company primarily focuses on the creation and implementation of vascular disruption agents (VDAs). The company's portfolio consists of two major solutions currently undergoing FDA testing, Zybrestat and OXI-4503. Zybrestat is a multifunctioning solution for patients with thyroid cancer, lung cancer, and ovarian cancer. OXI-4503 is defined as

a dual-mechanism vascular disrupting agent that is being developed in clinical trials for the treatment of leukemia. Like its structural analog, ZYBRESTAT, OXi4503 has been observed to block and destroy tumor vasculature, resulting in extensive tumor cell death and necrosis.

OXGN currently has a market cap of $15.9 million and an EPS of -$0.86/share. However, there's plenty of promise in both ZYBRESTAT and OXI-4503. OXGN's CEO Peter Langecker recently noted:

The partnership we established with Azanta in the fourth quarter to provide ZYBRESTAT to patients in Europe and Canada on a compassionate use basis was an important milestone in our ATC development program. Our major priorities are to secure sufficient financing to conduct the pivotal FACT2 trial in ATC and to complete the special protocol assessment (SPA) for this program with the FDA, which will lay the foundation for initiation of this global registration study.

Once funding is secured for these trials, OXGN will show even more promise.

Source: 3 Biopharma Picks: A Certain Level Of Risk Is Required