Biopharmaceutical companies have been struggling since 2021 and that narrative isn’t immediately changing. However, not every firm deserves this fate. In fact, investors can find great opportunities with “cheap” biotech stocks to buy now.

There are many reasons for investor pessimism that could soon ease. For instance, drug innovation has stagnated in 2022. Companies also haven’t been able to announce as many positive clinical readouts to build confidence. These both could change in a jiffy if a few positive regulatory decisions start to trickle in. Specifically, updates on Alzheimer’s treatments and those for non-alcoholic steatohepatitis (NASH) are in demand.

Investors should also realize that many biotech stocks have been held down by factors outside of their control. Higher interest rates and persistently high inflation have been weighing on the entire market.

Importantly, the pharma industry is recession-proof and is filled with defensive stocks.

For investors looking to capitalize on a potential second-half recovery, here are some cheap biotech stocks to buy.

Adicet Bio (ACET)

Adicet Bio (NASDAQ:ACET) is a clinical-stage biotech company developing allogeneic gamma and delta T-cell therapies for cancer. The most advanced candidate in the pipeline is a Phase 1 asset called ADI-001. This investigational therapy is being evaluated for non-Hodgkin’s lymphoma. The company expects ADI-001 to potentially advance to a pivotal program in the first half of 2023.

Adicet Bio is developing a second candidate, ADI-002, in collaboration with Regeneron (NASDAQ:REGN) for hepatocellular carcinoma – the most common type of primary liver cancer. Its pipeline is also flush with several preclinical assets. Underlining vibrant R&D  activity, the company said it expects to file one new investigational new drug (IND) application every 12-18 months.

At the end of the March quarter, the company had cash and cash equivalents of $277.9 million.

Near-term milestones on the horizon include:

• Zeroing in on the recommended dose for the Phase 2 study of ADI-001.
• Discussion with the FDA and European regulators regarding trial designs of two pivotal studies of ADI-001 and a potential path to support a biological license application.
• Preclinical pipeline update.
• Initiation of at least one potentially pivotal study of ADI-001.

IVERIC bio (ISEE)

IVERIC bio (NASDAQ:ISEE) is a New Jersey-based company developing treatments for retinal diseases. Its lead candidate Zimura is being developed for two indications, namely geographic atrophy and autosomal recessive Stargardt disease. It is in the advanced stage of development (Phase 3 stage) for the former indication.

A pre-clinical therapeutic candidate named IC-500 is also in clinical trials. The company is also testing out a handful of gene therapy candidates in preclinical and research stages for various kinds of retinal disorders.

The company expects its year-end cash and cash equivalents to be at $260 million to $270 million.

IVERIC bio is gearing up to report topline data from the second Phase 3 study of Zimura in September. The company is confident of reporting positive data. Pravin Dugel, president of IVERIC bio, hinted at making the treatment available to patients as quickly as possible.

Apellis Pharma (NASDAQ:APLS) has a similar drug in its pipeline for the same indication and its regulatory application has been accepted for review, with a PDUFA goal date of Nov. 26, 2023. IVERIC bio, however, could have an edge, as Apellis submitted mixed late-stage data.

Chinook Therapeutics (KDNY)

Seattle-based Chinook Therapeutics (NASDAQ:KDNY) develops precision medicines for rare kidney diseases. Atrasentan is the company’s most advanced pipeline asset. It is currently being tested in a Phase 3 registrational trial for IgA nephropathy (IgAN) and a Phase 2 basket trial for primary glomerular diseases.

Additionally, BION-1301 is in mid-stage development for IgAN, and CHK-336 is in early-stage development for hyperoxaluria.

Chinook’s investigational therapies cater to diseases where there are large unmet needs. Citing third-party estimates, the company said annual U.S. healthcare costs driven by kidney diseases stand at over $130 billion.

The company is due to release the following data in the second half of 2022:

• Additional Phase 2 data from the AFFINITY trial of Atrasentan in glomerular diseases
•  Data from Cohort 2 of Phase 1/2 study of BION-1301 in IgAN

Chinook had $440 million in pro forma cash as of March 31, 2022.

Rocket Pharma (RCKT)

Cranbury, New Jersey-based Rocket Pharma (NASDAQ:RCKT) is a late-stage clinical biotech developing gene therapies for rare childhood disorders with high unmet needs. Its clinical program consists of lentiviral vector (LLV)-based therapy for treating Fanconi anemia (FA), leukocyte adhesion deficiency-I (LAD-1), and pyruvate kinase deficiency (PKD).

It is also developing a AAV-based gene therapy for Danon disease, a pediatric heart failure condition. At least two of its candidates are in pivotal Phase 2 trials, suggesting they are inching closer to securing regulatory approvals.

The company has multiple readouts scheduled for the remainder of the year, including:

• Topline data from Phase 2 FA study (Q3’22)
• Pediatric cohort data from the Danon disease study (Q3’22)
• Initiation of pivotal activities for the Phase 2 Danone disease study (Q4’22)
• Preliminary Phase 1 data from the PKD study (Q4’22)
• Initiation of pivotal activities for the Phase 2 PKD study (Q4’22)

Pliant Therapeutics (PLRX)

Pliant Therapeutics (NASDAQ:PLRX) stock has defied the market-wide downturn seen since the start of the year. The stock is up nearly 30% year to date (YTD). The outperformance is primarily due to positive mid-stage data for its chronic idiopathic pulmonary fibrosis treatment PLN-74809 released earlier in July. The same candidate is also being developed for primary sclerosing cholangitis.

Along with Novartis (NYSE:NVS), Pliant Therapeutics is testing a Phase 1 asset for NASH-associated liver fibrosis. Its pre-clinical pipeline includes candidates against cancers and muscular dystrophies. The company plans IND submissions for these indications by year-end 2022.

Pliant Therapeutics boasts a strong financial position and has stated that operations are funded into mid-2024.

Following the early July jump, the stock is currently in overbought territory. Nevertheless, analysts are optimistic that the stock can gain further. The average price target for Pliant Therapeutics stock is $42.88, suggesting over 145% upside from current levels, according to TipRanks.

Kura Oncology (KURA)

Kura Oncology (NASDAQ:KURA) is a clinical-stage precision oncology company. Its pipeline consists of Ziftomenib, a Phase 1 asset it is testing for acute myeloid leukemia, and Tipifarnib, which it is testing for head and neck squamous cell carcinoma (HNSCC).

The company has a catalyst-rich second half. Key catalytic events for the period include:

• Identification of the recommended dose for the Phase 2 study of Ziftomenib (Q3)
• Topline data from the Phase 1 study of Ziftomenib (Q3)
• Starting of two separate combo trials of Tipifarnib, one in HNSCC and another in lung cancer (Q3)
• Submission of IND application for KO-2806 (Q4)

At the end of the first quarter, the company had cash, cash equivalents and investments of $480 million, providing it with runway through 2024.

Caribou Biosciences (CRBU)

Caribou Biosciences (NASDAQ:CRBU) is a clinical-stage genome-editing specialist.

Genomic editing is a group of technologies that allow changing the DNA of an individual by adding, removing, or otherwise altering genetic material at a particular location. CRISPR-Cas9 is the most commonly used approach for this.

The company has a proprietary genome-editing platform, chRDNA, that enables superior precision to develop cell therapies. Its pipeline consists of off-the-shelf CAR-T and CAR-NK cell therapies for the treatment of hematologic malignancies and solid tumors.

One of the company’s candidates, CB-010, is in Phase 1 clinical trials. It has an ongoing collaboration with AbbVie (NYSE:ABBV) for two CAR-T programs. The agreement between the companies also vests AbbVie with the option of adding two more programs.

Analysts’ average price target for Caribou is $27.80, suggesting over 200% upside from current levels.

On the date of publication, Shanthi Rexaline did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.