Cheap and junk don't have to go hand in hand. Sometimes, items that are inexpensive could still have tremendous potential for their values to increase. That can be true with anything you buy -- including biotech stocks.

There are many biotech stocks currently priced below $10 per share. Many of them, however, probably aren't smart picks right now. Some, though, could become huge winners over time. Here's why Celldex Therapeutics (NASDAQ:CLDX), Insys Therapeutics (NASDAQ:INSY), and Novavax (NASDAQ:NVAX) are three of the top biotech stocks under $10. 

Three $10 bills rolled up

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Celldex Therapeutics

Celldex is kind of like the phoenix from Greek mythology: It rises from the ashes. The biotech experienced a huge blow in early 2016 when its then-lead candidate Rintega flopped in a late-stage clinical study. That wasn't the end of the story for Celldex, though.

The small biotech has several other pipeline candidates. Glembatumumab vedotin (glemba) and varlilumab (varli) are the most promising. Results from a phase 2 study of a combination of the two experimental drugs in treating metastatic melanoma are expected to be reported this fall. Celldex also expects to announce results from a phase 1 study of KIT inhibitor CDX-0158 in treating advanced refractory gastrointestinal stromal tumors and other KIT-positive tumors by the end of the year. 

However, the announcement that investors are most anxiously awaiting is Celldex's update from its phase 2 study of glemba in treating breast cancer. If the results from this study are positive, the biotech hopes to submit glemba for regulatory approval. 

Many clinical-stage biotechs struggle with having enough cash, but Celldex appears to be in pretty good shape on that front. The company reported cash, cash equivalents, and marketable securities totaling $154 million at the end of the second quarter. That amount should be enough to fund operations through 2018, combined with additional sales of stock through its existing agreement with Cantor Fitzgerald & Co. 

Insys Therapeutics

There's good news and there's bad news for Insys Therapeutics. First, the bad news. Sales for Insys' top-selling product, opioid painkiller Subsys, continue to plummet. The opioid epidemic has made prescribers and payers wary of drugs like Subsys. Insys is also embroiled in several federal and state investigations about the company's marketing practices for Subsys. As a result of these factors, Insys has lost nearly half of its market cap over the last 12 months.

What's the good news? Insys recently launched Syndros, its cannabinoid treatment for anorexia associated with weight loss in AIDS patients and nausea and vomiting associated with chemotherapy in cancer patients. It's been a long time coming. Insys won Food and Drug Administration approval for Syndros last year, but had to wait for the U.S. Drug Enforcement Agency to schedule the drug and then for the FDA to finalize the label. Peak annual sales projections for Syndros range from $200 million on the low end to more than $300 million.

Marijuana buds in a test tube

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Insys also recently received some good news for Subsys. The biotech announced that the drug was being included on the formulary of a large pharmacy benefits manager (PBM) that had excluded the drug in the past, with the change becoming effective in July. In addition, Subsys will be the preferred TIRF (transmucosal immediate release Fentanyl) product on the formularies for two top pharmacy benefits managers and a large health insurer next year. 

The ongoing investigations continue to be an overhang for Insys, though. Questions about how well Syndros will be received in the marketplace also exist. However, if Syndros performs as well as the company expects and if Subsys sales stabilize, Insys stock should rebound nicely.  

Novavax

Most conversations about Novavax focus on the clinical-stage biotech's RSV F vaccine. The vaccine has shown significant promise, but Novavax has also experienced some disappointments. In September 2016, the company announced that its vaccine didn't meet the primary endpoint of efficacy in a late-stage study in older adults.

All isn't lost for Novavax, though. For one thing, the company is still plugging away with a phase 2 study of the RSV F vaccine in older adults. More important, Novavax has a late-stage study underway evaluating the vaccine in infants via maternal immunization. An interim analysis for that study is expected in mid-2018. 

Novavax also announced a pleasant surprise recently. The company's experimental nanoparticle flu vaccine showed a lot of promise in pre-clinical testing in ferrets. Based on those results, Novavax is aggressively moving forward with a clinical program for the vaccine. If all goes well, it could in position to file for regulatory approval as early as late 2019.

But all three of these stocks have significant risks. Novavax's primary risks relate to the uncertainty about its pipeline candidates. As the company found out last year, things can go downhill quickly. Novavax also could need to generate more cash in the not-too-distant future. If the means of doing so is through a stock offering, the dilution would likely cause share prices to tumble. On the other hand, if Novavax sees success with either of its vaccines, the stock should soar.  

Keith Speights has no position in any stocks mentioned. The Motley Fool recommends Celldex Therapeutics. The Motley Fool has a disclosure policy.