While the concept of high-risk speculation seems particularly dangerous at this juncture, gamblers may nevertheless want to consider the merits of targeting potentially lucrative biotech stocks that could be the next big thing. These lesser-known enterprises may not command worldwide attention at the moment. Nevertheless, they could yield tremendous profitability if they come through.

Another factor that benefits high-risk, high-reward biotech stocks centers on the underlying sector’s permanent relevance. No matter what’s going on with the economy or which bank happens to be failing, scientists will continue marching forward. Chronic diseases don’t wait for economic cycles to pass by and neither does the medical innovation sector.

Indeed, when the equities sector crumbled in 2022, the broader healthcare sector generally provided a solid performance. While individual biotechs present volatility risks, the search for viable therapeutics represents a perpetual endeavor. On that note, below are the biotech stocks to add to your portfolio.

Veracyte (VCYT)

Based in San Francisco, Veracyte (NASDAQ:VCYT) leverages innovations in genomic technology and machine learning to enable more confident diagnostic, prognostic and treatment decisions in challenging diseases such as lung cancer, prostate and bladder cancers, among other serious conditions. Since the start of the new year, VCYT gained about 2% of equity value.

Financially, Veracyte offers many attractive attributes. For starters, it enjoys a robust balance sheet. Its equity-to-asset ratio stands at 0.93 times, better than the sector median of 0.72. As well, its Altman Z-Score pings at 11.96, indicating extremely low bankruptcy risk.

Operationally, the biotech features a three-year revenue growth rate of 16.7%, above 64.52% of the industry. Also, its free cash flow (FCF) growth rate during the aforementioned period comes in at 52.4%, outpacing over 90% of its peers. Finally, Wall Street analysts peg VCYT as a consensus moderate buy. Further, their average price target stands at $31.50, implying over 36% upside potential. Therefore, it’s one of the most balanced (solid financials, upside growth potential) biotech stocks available.

Verona Pharma (VRNA)

Calling the U.K. home, Verona Pharma (NASDAQ:VRNA) focuses its efforts on its therapeutic ensifentrine, which may potentially be the first treatment for respiratory disease that combines bronchodilator and anti-inflammatory activity in one compound, according to its website. However, prospective investors should recognize that VRNA represents a volatile name among biotech stocks. Since the January opener, shares stumbled 23%.

Nevertheless, in the past 365 days, VRNA gained 277% of equity value. Aside from its underlying science, Verona enjoys some positive fiscal attributes. Most notably, the company benefits from a decently stable balance sheet. In particular, it features a cash-to-debt ratio of 21.4 times, above 60.5% of the industry.

Also, it’s worth pointing out that Verona’s three-year FCF growth rate pings at 32.6%, outpacing 77.78% of the competition. As well, the market prices VRNA at 1.58-times book value. In contrast, the sector median is 2.23 times. Lastly, covering analysts peg VRNA as a consensus (and unanimous) strong buy. Their average price target stands at $30, implying over 59% upside potential.

Agios Pharmaceuticals (AGIO)

Headquartered in Massachusetts, Agios Pharmaceuticals (NASDAQ:AGIO) pioneers therapies for genetically defined diseases, with a near-term focus on developing therapies for hemolytic anemias. Although one of the more promising of the speculative biotech stocks, AGIO presents huge risks. Since the Jan. opener, shares stumbled 17%. In the past 365 days, they’re down 16%.

Financially, Agios will almost certainly test the patience of prospective investors. Mainly, Agios suffers from relatively small revenue. On the other side, it operating losses are quite massive, consistently leading to net losses. For instance, its retained earnings line item sits at $470.56 million below parity.

Still, on the positive side, Agios benefits from a decently stable balance sheet. Its Altman Z-Score is 5.05, reflecting low bankruptcy risk. Also, the market prices shares at a trailing book multiple of 1.14. As a discount to book, Agios ranks better than 73% of the competition. Turning to Wall Street, analysts peg AGIO as a consensus strong buy. Moreover, their average price target stands at $39.25, implying nearly 72% upside potential.

Janux Therapeutics (JANX)

Based in sunny California, Janux Therapeutics (NASDAQ:JANX) concentrates on developing tumor-activated immunotherapies that are precision-engineered to foster positive patient outcomes. Generally, it’s holding up well compared to other high-risk, high-reward biotech stocks. Since the beginning of the year, JANX gained over 2% of equity value. However, in the past 365 days, it’s down more than 15%.

As with Agios Pharmaceuticals above, Janux will require patience among prospective contrarians. Again, we’re talking about a small-revenue enterprise. As well, it runs relatively steep operating losses. Therefore, it consistently posts net losses quarter after quarter.

Still, it’s not all terrible news on the financials. The company commands a respectable balance sheet, with an equity-to-asset ratio of 0.88. This stat favorably outpaces 78% of the competition. As well, its Altman Z-Score is 8.05, indicating very low bankruptcy risk. Finally, the market prices JANX at a trailing book multiple of 1.86, below the sector median 2.23 times. Looking to the Street, H.C. Wainwright’s Swayampakula Ramakanth pegs JANX as a buy. Further, the expert’s price target of $35 implies upside potential of nearly 144%.

Adicet Bio (ACET)

Headquartered in Boston, Massachusetts, Adicet Bio (NASDAQ:ACET) specializes in universal off-the-shelf T-cell therapy for cancer. Specifically, it researches and develops the potential of gamma delta T cells, which represents a new generation of universal immune cell therapy. While the underlying science compels, ACET also represents crazy risks. In the trailing year, ACET lost nearly 39% of equity value.

Operationally as well, prospective investors should be prepared for hefty risks. For instance, the company’s three-year revenue growth rate sits at 9.1% below parity. Further, both its operating and net margins on a trailing-year basis ping well into negative territory.

On the flipside, Adicet benefits from a decently stable balance sheet. Notably, its Altman Z-Score is 5.08, indicating fiscal stability. Also, the market prices ACET at a trailing book multiple of 1.07. As a discount to book value, Adicet ranks better than nearly 75% of the competition.

Finally, Guggenheim’s Michael Schmidt rates ACET as a buy. Moreover, the expert forecasts a price target of $20, implying over 151% growth potential. Therefore, if you can handle the heat, it’s one of the biotech stocks to buy.

OmniAb (OABI)

Headquartered in Emeryville, California, OmniAb (NASDAQ:OABI) provides its pharmaceutical industry partners with access to the most diverse antibody repertoire and cutting-edge screening technologies, per its website. This enables the discovery of next-generation therapeutics. Since the start of the year, OABI gained almost 3% of equity value. Still, since its public market debut, OABI dropped over 64%.

Easily one of the riskiest biotech stocks to consider, OmniAb probably isn’t appropriate for everyone. Like some of the high-risk plays above, OmniAb features questionable financials. Perhaps most notably, the company suffers from haphazard revenue generation. However, it consistently posts operating losses, leading to consistent net losses.

Still, it does enjoy redeeming qualities. Most conspicuously, its Altman Z-Score comes in at 15.64, indicating extremely low bankruptcy risk. Also, the market prices OABI at a trailing book multiple of 1.83. As a discount to book, OminAb ranks better than 62% of the field. Turning to the Street, covering analysts peg OABI as a unanimous strong buy. Further, their average price target stands at $11, implying 209% upside potential.

Sol-Gel Technologies (SLGL)

Saving perhaps the riskiest candidate for biotech stocks to consider for last, Sol-Gel Technologies (NASDAQ:SLGL) features an advanced pipeline of products for the treatment of rare skin diseases. Presently, the company offers two products approved by the Food and Drug Administration: Twyneo for the treatment of acne vulgaris and Epsolay for the treatment of inflammatory lesions of rosacea.

Fundamentally, Sol-Gel clearly aligns as an aspirational firm. For example, its three-year revenue growth rate sits at 47.7% below parity. Both its operating and net margins fell deep into negative territory on a trailing-12-month basis.

However, it also benefits from redeeming qualities. Most noticeably, Sol-Gel commands a very stable balance sheet, particularly via its cash-rich profile. Also, its Altman Z-Score pings at 6.47, indicating low bankruptcy risk. Plus, from a trailing sales and book value basis, SLGL is undervalued. Finally, a consensus of two analysts peg SLGL as a buy. More importantly, their average price target stands at $14.50, implying over 307% upside potential.

On the date of publication, Josh Enomoto 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.