2025 biotech outlook: Small-cap innovators tackling chronic and rare diseases

In the New Year, many small-cap biotech companies will be advancing promising clinical trials with innovative therapies aimed at addressing significant unmet medical needs.

Key trials include those focused on cancer immunotherapies, treatments for neurological conditions like multiple sclerosis and Alzheimer's, as well as novel approaches to metabolic diseases and chronic pain.

Here are the top trials to keep an eye on in 2025. 

Candel Therapeutics

Candel Therapeutics Inc (NASDAQ:CADL), which is advancing its novel therapy CAN-2409, is set to report the results of its ongoing Phase 2 trials in non-small cell lung cancer (NSCLC) and pancreatic cancer in 2025. 

Earlier this year, the company shared Phase 2 trial results showing that CAN-2409 combined with valacyclovir extended median survival to 20.6 months in NSCLC patients whose disease had worsened despite ICI therapy, with good safety and signs of immune system activation.

The company also recently announced that its Phase 3 trial of CAN-2409 in intermediate-to-high-risk localized prostate cancer met its primary endpoint, showing a statistically significant improvement in disease-free survival when combined with radiation therapy.

This outcome could represent a significant advancement in prostate cancer treatment, and Candel intends to engage with the US Food and Drug Administration (FDA) in 2025 to discuss regulatory pathways.

Medicus Pharma

Medicus Pharma (NASDAQ:MDCX, TSX-V:MDCX) is making strides in its Phase 2 clinical study (SKNJCT-003) for the treatment of basal cell carcinoma (BCC), currently underway at nine clinical sites across the United States.

The SKNJCT-003 clinical study is a randomized, double-blind, placebo-controlled trial evaluating the efficacy of Doxorubicin-containing microneedle array (D-MNA) in treating BCC, enrolling subjects across three groups: placebo, low-dose, and high-dose D-MNA. More than 25% of the 60 patients expected to be enrolled in the study have already been randomized.

The company plans to conduct an interim data analysis in Q1 2025 and submit its findings to the FDA to discuss the next steps in the clinical development program. Medicus aims to fast-track the study and potentially transition the trial into a pivotal phase.

Additionally, Medicus has entered a collaboration agreement with healthcare consulting firm Swanielle to explore expanding the Phase 2 study into the Asia-Pacific region.

Viking Therapeutics

In 2025, Viking Therapeutics (NASDAQ:VKTX) will continue advancing its clinical trials, focusing on the development of VK2809, its novel liver-selective thyroid hormone receptor beta agonist.

Based on the promising results from its Phase 2b VOYAGE study, which demonstrated significant reductions in liver fat, non-alcoholic steatohepatitis (NASH) resolution, and fibrosis improvement, Viking plans to progress VK2809's development for treating NASH and metabolic dysfunction-associated steatohepatitis.

The company is also advancing its pipeline with additional clinical studies, including ongoing trials for obesity treatments and other metabolic disorders.

Tiziana Life Sciences

In 2025, Tiziana Life Sciences Ltd (NASDAQ:TLSA) is expected to make significant progress in its clinical trials of its lead investigational candidate foralumab.

This includes its Phase 2 trial of intranasal foralumab for non-active secondary progressive multiple sclerosis, which was recently expanded to prestigious US Medical Centers including Yale University, Johns Hopkins University and Cornell University.

The company also plans to advance its groundbreaking research into Alzheimer's disease, following the recent dosing of the first patient with moderate Alzheimer’s and the anticipated start of a study targeting mild cases.

atai Life Sciences

atai Life Sciences (NASDAQ:ATAI, ETR:9VC), a clinical-stage biopharmaceutical company focused on developing innovative therapies for mental health disorders, is advancing clinical trials for its VLS-01 and EMP-01 programs, with data readouts expected in the new year.  

VLS-01, a buccal film formulation of DMT for treatment-resistant depression is set to progress through its Phase 2 study, with topline results expected around the end of the year.

Additionally, atai plans to initiate a Phase 2 trial for EMP-01, an oral formulation of R-MDMA, in social anxiety disorder (SAD), with results anticipated by the end of 2025.

ImmunityBio

ImmunityBio (NASDAQ:IBRX) is set to expand its clinical trials, particularly with its immunotherapy ANKTIVA in non-muscle invasive bladder cancer (NMIBC), prostate cancer, and non-small cell lung cancer. 

The QUILT 3.032 study, showing a 71% complete response rate in BCG-unresponsive NMIBC, supports submissions to the European Medicines Agency in Q4 2024.

The company is also targeting a broader market launch in 2025, with ANKTIVA’s J-code effective January 2025, facilitating wider patient access. Additionally, ImmunityBio plans to submit ANKTIVA for approval in the United Kingdom and the European Union. 

NanoViricides

NanoViricides (NYSE-A:NNVC) plans to advance its broad-spectrum antiviral NV-387, with a focus on progressing the drug into Phase 2 clinical trials for multiple indications, including MPox, respiratory syncytial virus (RSV), and influenza.

After completing a Phase 1 trial in healthy subjects with no reported adverse events, the company is moving forward with a Phase 2 trial for MPox in Central Africa, addressing a significant unmet need for effective treatments. This trial will evaluate NV-387’s potential to address the high fatality rate of MPox Clade 1/1b, for which no effective treatments are currently available.

NanoViricides is also preparing to launch a Phase 2 trial for NV-387 in RSV in the United States, aiming to provide a new therapeutic option for this respiratory infection.

Immunic Therapeutics

Another key trial to watch in 2025 is Immunic Inc (NASDAQ:IMUX)’s Phase 2 CALLIPER trial for progressive multiple sclerosis (PMS), with top-line data expected in April.

CALLIPER is investigating the effects of vidofludimus calcium, a potential oral treatment for PMS, targeting its neuroprotective and anti-inflammatory properties.

The Phase 2 trial is already showing promising interim data, suggesting that the drug could slow disease progression and may offer a new treatment option for patients with non-relapsing secondary PMS.

Lisata Therapeutics

Lisata Therapeutics Inc (NASDAQ:LSTA) is focused on advancing its certepetide program in 2025, with significant updates expected from the CENDIFOX trial, a Phase 1b/2a open-label study evaluating the combination of certepetide with FOLFIRINOX-based therapies for pancreatic, colon, and appendiceal cancers.

Certepetide is a cyclic peptide designed to enhance the delivery of anti-cancer agents to tumors by activating the C-end rule transport mechanism. The trial has completed patient enrollment and will provide valuable safety and efficacy data, with results anticipated in 2025.

Additionally, Lisata is progressing with multiple other studies, including the ASCEND trial targeting metastatic pancreatic ductal adenocarcinoma (advanced pancreatic cancer), with interim data expected at the American Society of Clinical Oncology Gastrointestinal Cancers Symposium in January, and the BOLSTER trial, which is expected to deliver topline data for first-line cholangiocarcinoma (bile duct cancer) in mid-2025.

Acquestive Therapeutics

Aquestive Therapeutics (NASDAQ: AQST) is set to submit a New Drug Application to the FDA for anaphylm (epinephrine) sublingual film, with the goal of advancing the clinical development of the first orally delivered epinephrine treatment for severe allergic reactions, including anaphylaxis. 

Following positive feedback from the FDA, the company commenced a pediatric clinical trial for Anaphylm in December 2024 at sites in the US and Canada. The FDA has endorsed the company’s planned safety evaluation and pediatric trial protocol, requiring only minor modifications. 

The company will also continue to expand the availability of Libervant (diazepam) buccal film, which has received FDA Orphan Drug Exclusivity for the treatment of seizure clusters in pediatric patients ages two to five. 

Cardiol Therapeutics

Cardiol Therapeutics (TSX:CRDL, NASDAQ:CRDL) is advancing its lead drug, CardiolRx, into pivotal late-stage trials for recurrent pericarditis, with key milestones anticipated in 2025.

The company’s MAVERIC-2 trial will explore the effects of CardiolRx in patients who have stopped using interleukin-1 (IL-1) blockers, following promising preliminary results. This Phase 2/I3 trial will be randomized and placebo-controlled, evaluating the ability of CardiolRx to prevent the recurrence of pericarditis after discontinuing IL-1 blockers, with an expected readout before Cardiol's Phase 3 MAVERIC-3 trial begins.

Additionally, Cardiol’s Phase 2 ARCHER trial results in acute myocarditis, which completed enrollment in September 2024, are expected in early 2025. This study will assess CardiolRx's impact on myocardial recovery, with a focus on key cardiac markers, including left ventricular function and myocardial edema.

OKYO Pharma

OKYO Pharma Ltd (NASDAQ:OKYO)'s Phase 2 clinical trial of OK-101, a novel non-opioid therapeutic designed to treat neuropathic corneal pain, is set to provide critical insights into its potential to address this condition, which currently has no FDA-approved treatments.

This randomized, placebo-controlled trial will involve 48 patients, with results expected in early 2025.

Previous trials of OK-101 for dry eye disease and pre-clinical models have shown promising reductions in ocular pain and inflammation.