2 Small-Cap Stocks That Could Make You Rich

Growth stocks that can turn an initial investment of $20,000 into a million-dollar payday in roughly 20 years’ time aren’t as rare as you might think. For instance, the biotech heavyweights Biogen and Gilead Sciences both accomplished this feat over the prior two decades. The trick is spotting small-cap companies with large-cap potential well ahead of the crowd.

Which under-the-radar small-cap stocks sport this key element right now…

The orphan-drug maker Catalyst Pharmaceuticals (NASDAQ:CPRX) and the premium marijuana dispensary company MedMen Enterprises (NASDAQOTH:MMNFF) are two promising prospects. Here’s a nuts-and-bolts overview of these two small-cap growth stocks.

A tiny orphan-drug maker with enormous potential

Catalyst Pharmaceuticals has had a volatile year. The company’s stock started to heat up after the launch of its Lambert-Eaton myasthenic syndrome (LEMS) drug Firdapse. But a surprise approval by a rival therapy in the United States halted the drugmaker’s upward momentum last May.

Catalyst is now in the process of challenging the legality of this unexpected regulatory approval in federal court, but the outcome of this lawsuit is obviously far from certain. Catalyst’s core value proposition nevertheless rests squarely on Firdapse’s continued uptake in LEMS, highlighting the serious threat this alternative therapy poses to the company’s near- and long-term prospects.

The flip side of the coin is that Catalyst still has a shot at generating a healthy $200 million in peak sales from Firdapse’s LEMS indication early in the next decade. And if this revenue forecast turns out to be correct, Catalyst’s stock should turn out to be a tremendous growth vehicle for early-bird investors. The biotech’s market cap, after all, currently sits at a mere $521 million.

Is Catalyst worth the risk? The bottom line is that this small-cap orphan-drug stock isn’t for the faint of heart. If Firdapse’s commercial trajectory loses steam, Catalyst’s shares will suffer as a result. That said, this drug does have the potential to be Catalyst’s fundamental building block, enabling the company to build out a much broader pipeline of rare-disease products in the next decade. So if you’re not put off by a high degree of risk, this tiny drugmaker should definitely be on your radar right now…

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