But which small caps are buys? Let's take a look at three that Morgans is recommending to clients:

Meeka Metals Ltd (ASX: MEK)

This gold miner could be a small-cap ASX share to buy according to Morgans. In response to the company's quarterly update, the broker has retained their buy rating and 33 cents price target on its shares.

It was relatively pleased with the miner's performance during the quarter. It said:

MEK delivered its 2Q26 operating result as the Murchison Gold Project continues to ramp up. Gold production increased 28% quarter on quarter to 9.1koz Au and was in-line with MorgansF of 9.3koz Au. Ounce production was underpinned by a mill head grade of 3.3g/t Au, ~10% above MorgansF assumptions; however, this grade outperformance is partially offsetting lower-than-expected throughput.

Looking ahead, improvements in mill throughput, driven by underground production, remain key to maintaining alignment with PFS forecasts We maintain our BUY rating, price target A$0.33ps and update our precious metals price deck.

Neurizon Therapeutics Ltd (ASX: NUZ)

Another small-cap ASX share that gets a thumbs up from Morgans is Neurizon. It has put a speculative buy rating on its shares with a reduced price target of 28 cents.

The broker believes that with major risks cleared, now is a great time to be jumping on board with this clinical-stage biotech company. This is especially the case given how there is a condensed catalyst runway ahead of it. It said:

Following FDA clearance, the imminent start of the Ph2/3 trial and the removal of the funding overhang providing full visibility through the pivotal program, NUZ now offers one of the cleanest entry points seen in the past 18 months, with major risks cleared and a condensed catalyst runway ahead.

Recent M&A activity underscores the scarcity value of ALS assets and provides a meaningful valuation anchor for NUZ if its clinical program delivers. Post recent capital raises, we update for the new share issuances which drive a reduction in our target price to A$0.28 from A$0.39, although we maintain our Speculative Buy rating, noting the high risk / high reward proposition.

Saluda Medical Inc (ASX: SLD)

This commercial-stage medical device company could also be a small-cap ASX share to buy according to Morgans. It has put a speculative buy rating and $3.07 price target on its shares.

It was pleased with the company's second quarter update and management revenue guidance upgrade for FY 2026. The broker said:

2Q activity report debut did not disappoint, highlighting accelerating US commercial momentum, cost actions to reduce future operating expenses and upgraded FY26 revenue guidance. Revenue growth jumped 15% QoQ, supported by rising implanted patient volumes, and continued expansion of both sales reps and implanting physicians, while cash outflow fell 14% QoQ on a lower fixed cost base supportive of operating leverage.

We believe management's decision to lift FY26 revenue guidance c4% at this early-stage post-IPO reflects improving visibility on sales execution and demand trends, reinforcing confidence in a stronger 2H performance. We update FY26 forecasts in line with guidance, with our DCF-based TP unchanged at A$3.07. SPECULATIVE BUY maintained.

The post Morgans names 3 exciting small cap ASX stocks to buy now appeared first on The Motley Fool Australia.

But which ones could be buys?

Fortunately, the team at Morgans has done the hard work for you by picking out two small caps that it rates as speculative buys with major upside potential. They are as follows:

Micro-X Ltd (ASX: MX1)

The first small cap ASX share that Morgans is positive on is Micro-X. It is a tech company developing and commercialising products for global health and security markets based on proprietary cold cathode, carbon nanotube (CNT) emitter technology.

The broker has been pleased with the progress the company has been making. This includes winning a major contract for its Rover Plus offering this month. It said:

MX1 continues to make solid progress across all its verticals. Today MX1 announced its largest contract for its Rover Plus worth A$3.3m. Other recent announcements note positive progress on the Head CT imaging project with the ASA, a A$4.4m grant to trial the head CT scanner in standard ambulances for stroke diagnosis and a contract extension with the DHS to enhance the self-screening checkpoint detection algorithm.

We have made no changes to forecasts or valuation of A$0.17. The cadence of news flow increases our confidence that MX1 has reached an important inflection point and deserves greater investor attention. We maintain our SPECULATIVE BUY recommendation.

Morgans has a speculative buy rating on its shares with a price target of 17 cents. Based on its current share price of 11 cents, this implies potential upside of 55% over the next 12 months.

Neurizon Therapeutics Ltd (ASX: NUZ)

Another small cap ASX share that has caught the eye of Morgans is Neurizon Therapeutics.

It was pleased to see the US Food & Drug Administration (FDA) lift the clinical hold on its NUZ-001 product this week. It notes that this removes a major regulatory overhang and ought to be considered a de-risking event. It said:

The FDA has finally lifted the clinical hold on NUZ-001 after 9 months, clearing the way for NUZ to join the HEALEY ALS Platform Trial and removing a major regulatory overhang. First patient enrolment in the HEALEY trial is targeted by the end of the year, with initial data possible by late 2026 depending on recruitment rates.

This is a major catalyst and a clear regulatory de-risking event for NUZ. With a validated IND and a clear path into HEALEY, we expect renewed investor interest and momentum in the stock as the company advances towards trial and data. Our target price moderates to A$0.39 and we maintain our Speculative Buy rating.

Morgans has a speculative buy rating and 39 cents price target on its shares. Based on its current share price of 14 cents, this suggests that upside of well over 100% is possible between now and this time next year.

The post Morgans says these small cap ASX shares can rocket 50% to 100%+ appeared first on The Motley Fool Australia.

The company stated that the US Food and Drug Administration (FDA) had lifted the clinical hold on the drug, which the company claims has shown promising results in both preclinical and clinical studies.

Neurizon has so far had positive results in a Phase I clinical trial of NUZ-001, "highlighting the safety, tolerability and potential for long-term efficacy" for treating the neurodegenerative disease ALS.

The company's Managing Director, Dr Michael Thurn, said on Monday that the FDA clearance was a significant milestone.

We are deeply grateful to the key opinion leaders and patient advocacy groups whose steadfast support and engagement were instrumental in shaping and advancing this program. Their efforts in raising awareness and lobbying for the urgent needs of the ALS community have been invaluable in helping us reach this point. We are now partnering with the HEALEY ALS Platform Trial team to take the next critical steps in advancing NUZ-001.

Dr Thurn said they had so far delivered "compelling" preclinical data, and the team believed NUZ-001 "has the potential to meaningfully slow the progression of this devastating disease''.

Way cleared for development

The company said opening an "investigational new drug" (IND) process with the FDA would establish a regulatory foundation which "not only accelerates the development of the first candidate but also streamlines future programs''.

By creating a validated framework for safety, manufacturing, and clinical design, it reduces regulatory risk, shortens timelines, and enables efficient expansion into new indications. In this case, the IND is further strengthened by the robust and comprehensive package of preclinical safety data and the detailed manufacturing and quality information secured through our licensing agreement with Elanco.

Neurizon said with the IND now active, it expected Mass General Hospital to file a protocol amendment to their IND for the HEALEY ALS Platform Trial "to incorporate our specific protocol regimen early in the coming weeks''.

The company said it expected to start patient enrolment for that trial in the fourth quarter of calendar year 2025.

Together, these milestones advance Neurizon's mission to accelerate patient access to innovative therapies, create long-term value for shareholders, and establish NUZ-001 as a potential effective treatment for ALS.

ALS, or amyotrophic lateral sclerosis, is a progressive neurodegenerative disease that affects nerve cells in the brain and spinal cord, leading to the loss of muscle control.

Neurizon shares traded as high as 16.5 cents, up 13.8%, before settling to 15 cents.

The company was valued at $77.5 million at the close of trade on Friday.

The post Junior biotech's shares jump 10% on good news out of the US appeared first on The Motley Fool Australia.

At the time of writing, the ASX healthcare stock is up almost 20% to 24.5 cents.

Why is this ASX healthcare stock rocketing?

Investors have been bidding the clinical-stage biotechnology company's shares higher following the release of an announcement this morning.

According to the release, the company's Open-Label Extension (OLE) study has delivered some very promising results.

The OLE study is investigating the long-term safety, tolerability, and efficacy of monepantel (MPL) in patients with Motor Neurone Disease (MND)/Amyotrophic Lateral Sclerosis (ALS).

The study involves two sites in Australia, Calvary Health Care Bethlehem, led by Associate Professor Susan Mathers, and Macquarie University, led by Professor Dominic Rowe.

MPL is a potent and safe inhibitor of the mTOR pathway. The company notes that this pathway plays a central role in the growth and proliferation of cancer cells and degenerating neurons. It regulates the cellular cleaning process, where toxic proteins are broken down into macromolecules to be reused. This autophagic process is disrupted in most neurodegenerative diseases, including ALS.

What's the latest?

The ASX healthcare stock revealed that its updated data analysis conducted by Berry Consultants shows a statistically significant survival benefit for MPL compared to untreated matched-controls from the Pooled Resource Open-Access ALS Clinical Trials (PRO-ACT) database for patients with MND/ALS.

It notes that treatment with MPL significantly reduced the risk of death by 91% when compared to PRO-ACT matched controls.

In addition, management highlights that the updated analysis of the rate of decline in ALSFRS-R is to include the compassionate use program and continued to show that MPL reduces the rate of disease progression.

Enrolment on to the OLE Study is now complete with 10 of the 12 patients from the Phase 1 MEND Study rolling over.

What's next?

The ASX healthcare stock's managing director, Dr Michael Thurn, believes this is a significant milestone for the company.

He also notes that it sets the company up well ahead of the expected commencement of the Phase 2/3 STRIKE study later this year. Dr Thurn commented:

I'm very pleased that we have completed enrolment in the OLE study as this is a significant milestone for PharmAust. The updated survival analysis conducted by Berry Consultants is extremely encouraging, as is the updated efficacy analysis that indicates MPL continued to slow the rate of disease progression in patients with MND/ALS. These results provide an exciting backdrop ahead of the anticipated commencement of the pivotal adaptive Phase 2/3 STRIKE study in H2 2024.

The post Guess which ASX healthcare stock just rocketed 20% on a 'significant milestone' appeared first on The Motley Fool Australia.

I say no, because it keeps you motivated to keep researching and investing.

It also reminds you that diversification can not only reduce risk from losers, it allows spectacular winners to carry the whole portfolio upwards.

On that point, there is one small-cap stock that's been making waves in 2024.

In fact, it has almost tripled in share price so far this year.

Let's check out what's happening:

Cast your mind back to spring

Perth biotech PharmAust Limited (ASX: PAA) may only have a market capitalisation of around $129 million, but not so long ago it was even smaller than that.

Let's go on a very short journey in the time machine — back to November.

At that time the PharmAust share price was hovering around 7 cents. In fact, it had been more or less at that mark for a good three years.

Hypothetically, let's imagine you bought $30,000 worth of shares then.

At the start of December, the company presented some favourable results from a study of its monopetal product. The solution aims to treat motor neurone disease (MND), which is known as Lou Gehrig's Disease in North America.

The market took notice and sent the stock shooting up.

But then just two weeks ago, more positive test results came out, that really put a rocket under the ASX stock.

The wash up is that the shares are 33 cents at the time of writing.

That $30,000 you invested just four months ago? That's now worth a cool $141,428.

How does that compare to a term deposit?

This biotech stock and a bunch of losers = win

Now, no one is expecting that you'll land this sort of winner every time.

But if you can manage one or two multi-baggers within a diversified portfolio, that's all you need to grow your wealth.

Check this out. 

Say, at the time you bought PharmAust shares, you also bought four other stocks for $30,000 each.

Then in the four months that PharmAust was going crazy, the other four were having a miserable time to dive 25% each.

Your overall portfolio would still be a stunning 54% up in just one-third of a year.

Good luck with your investments.

The post If you'd put $30,000 in this ASX biotech stock 4 months ago, you'd have $140,000 now appeared first on The Motley Fool Australia.

PharmAust Limited (ASX: PAA) had requested a halt to trading of its shares before the market opened on Monday.

On Tuesday evening the company released its phase 1 study results for its monepantel drug that aims to treat motor neurone disease (MND), also known as Lou Gehrig's disease.

PharmAust reported that its product showed "a superior safety, tolerability to the leading FDA approved drug Relyvrio".

As soon as the stock was free to be traded on Wednesday, the market went into a frenzy.

The PharmAust share price surged 39.5% within the first few minutes of trading.

The $147 million business, in a matter of minutes, all of a sudden became a $205 million player on the ASX.

Adapting an existing drug for different uses

Incredibly, the small cap had already soared 375% over the last 12 months even before Wednesday's pile-on.

Monepantel is a drug that's already commercially used to treat sheep for worm infestations.

PharmAust has patents for repurposing this product with the goal of treating serious diseases in humans and cancer in dogs.

Motor neurone disease currently has no cure.

The PharmAust website explains that in mammals, monepantel is "a potent inhibitor of the mTOR pathway". 

"The mTOR pathway regulates the cellular 'cleaning process', where toxic protein is broken down into macromolecules to be reused.

"This autophagic process is disrupted in most neurodegenerative diseases, including motor neurone disease."

The Perth company is led by chair Dr Roger Aston and chief executive Dr Michael Thurn.

The post This small-cap ASX stock just rocketed 39%. What's doing? appeared first on The Motley Fool Australia.

What did PharmAust announce?

Investors are pushing PharmAust shares higher after taking in the company's progress on antiviral activity against COVID-19.

In its announcement, PharmAust provided an update on its lead drug candidates as antiviral therapeutics. These include monepantel (MPL) and also monepantel sulfone (MPLS).

The company stated that data from extensive testing at Leiden University Medical Center (LUMC) has demonstrated antiviral activity in non-human primate systems. This follows two previous independent laboratories that conducted MPL's antiviral activity in both primate and non-primate cell cultures mid-last year.

MPL and its metabolite MPLS are potent and safe inhibitor of the mTOR pathway. This is the pathway that influences cancer growth, neurodegenerative diseases, and viral infections. MPL has been evaluated in the human phase 1 trial and exhibited preliminary evidence of anticancer activity.

PharmAust noted that solubility issues of MPL in the in-vitro systems remain challenging. However, it has resolved solubility issues of the administration to patients through developing an MPL tablet dosage form.

When consumed, MPL is converted to MPLS in the body, representing the dominant form in a person's plasma.

Principal investigator at LUMC, associate professor Martijn van Hemert commented:

There are indications for an antiviral effect in these assays, but solubility issues under the conditions required for cell-based screening complicate analysis. Additional experiments will now be performed on SARS-CoV-2 infected human lung cell lines

PharmAust Chief Scientific Officer, Dr Richard Mollard added:

Testing highly insoluble drugs such as MPL in established complex culture conditions is notoriously difficult. We look forward to updating the market as these programs continue.

PharmAust and LUMC will seek to move its antiviral development program to testing in human cells.

PharmAust share price snapshot

Over the past 12 months, the PharmAust share price has accelerated over 50% of its value. Most of the gains came from June 2020 when the company announced its preliminary COVID-19 results.

On valuation grounds, PharmAust presides a market capitalisation of around $33.2 million, with 316.7 million shares outstanding.

The post PharmAust (ASX:PAA) share price soars 7% on positive update appeared first on The Motley Fool Australia.

PharmAust is a clinical-stage oncology company that is developing targeted cancer therapeutics for humans and animals. 

The company's lead drug candidate is monepantel (MPL), a novel inhibitor of the mTOR pathway which is a key driver of cancer.

Today's rise comes as the company released a shareholder update, which summarised recent developments:

MPL shows "remarkable" results against COVID-19

In April, PharmAust began working with the Walter and Eliza Hall Institute of Medical Research to investigate the effects of MPL and monepantel sulfone (MPLS) on the SARS-CoV-2 virus that causes COVID-19 infections.

As disclosed in an ASX release on 18 June 2020, repeat experiments demonstrated that "infectivity of SARS-CoV-2 virus particles can be suppressed by up to 95% in cell structures by either MPL or MPLS".

Commenting on the results, Walter and Eliza Hall Institute researcher Professor Marc Pellegrini said:

"These exciting repeat results validate the results of the initial test and form strong grounds for progressing the drug to the next step. Demonstrating twice, that infectivity of SARS-CoV-2 virus particles can be suppressed by up to approximately 95% in cell cultures is a remarkable outcome."

As for next steps, PharmAust will prepare an executive summary and investigator's brochure to permit discussions with clinicians about a Phase I trial. The trial would involve a small number of human patients to test the efficacy of MPL as a treatment for COVID-19.

MPL canine trial achieves successful anti-cancer outcome

The next section of today's shareholder update relates to a canine trial. 

As announced on 12 May, PharmAust achieved a successful outcome in the veterinary Phase II clinical trial investigating the effects of MPL on dogs with treatment-naïve B cell lymphoma.

The company advised today that a dossier will be presented to the MPL compound owner and option partner, Vet Major, in July 2020. This will provide Vet Major with the opportunity to activate its 6-month exclusive option over the licensing of MPL for veterinary uses.

Phase II human cancer trial

PharmAust also confirmed today it continues to make progress towards the evaluation of MPL in human trials.

The company completed a Phase I clinical trial at the Royal Adelaide Hospital in 2015.

PharmAust has since conducted further tablet formulation and pharmacokinetic studies. It has also investigated changes in tablet size to enable more specific targeting of calculated optimum dose levels.

With this, the company is aiming to conduct a third GMP-grade manufacture program for MPL tablets in or around Q3 2020 to cater to future human trials.

PharmAust is also seeking to identify a suitable clinical oncology unit to evaluate the new MPL tablet in humans in a Phase II trial.

Epichem

Finally, PharmAust provided an update on its wholly-owned subsidiary, Epichem. 

Epichem is a profitable medicinal and synthetic chemistry company with expertise and capacity in the field of drug development, discovery, and design.

Today, PharmAust revealed that Epichem is on track to deliver $3.46 million revenue in FY20. This is an increase on the $3.34 million projected revenue forecast provided back in January.

After today's jump, PharmAust's market capitalisation is sitting a touch under $50 million. If you'd rather invest in much larger and more liquid companies, check out the ASX growth shares in the free report below.

The post PharmAust share price soars 22% on shareholder update appeared first on The Motley Fool Australia.