Over the past month, lots of biotech stocks have been hammered for reasons that aren't always clear. The market has made mistakes in the past and investors are right to assume it may have gone too far with some of these unfortunate companies.

Can any of these beaten-down drugmakers bounce back? Here's what investors should know before taking another step toward buying these risky stocks.

Company (Symbol) One-Month Gain (Loss) Market Cap Cash and Equivalents on June 30, 2019
G1 Therapeutics (GTHX 3.82%) (45%) $788 million $325 million
UroGen Pharma (URGN 37.58%) (37%) $467 million $90 million
Kiniksa Pharmaceuticals (KNSA -0.90%) (36%) $326 million $83 million

Data source: Yahoo! Finance.

A compass with the needle pointing to the word Value.

Image source: Getty Images.

1. G1 Therapeutics: Ups and downs

This stock tanked in late September after reporting a positive result that investors were expecting -- and a disappointing result that caught everyone off guard. Adding G1 Therapeutics' lead candidate, trilaciclib, to standard chemotherapy reduced the risk of death by 64% for twice-relapsed patients with triple-negative breast cancer.

G1 Therapeutics had already told investors that trilaciclib provided a significant survival benefit. Unfortunately, trilaciclib failed to meet the trial's primary end point, which was to prevent standard chemo from destroying lots of white blood cells.

G1 Therapeutics also reported disappointing results from a trial with a different group of breast cancer patients who tried G1T48, the company's new drug candidate behind trilaciclib. The treatment shrank tumors for just one patient out of 19 and stabilized the disease for two others.

The company has also produced data that suggests trilaciclib significantly reduced the severity of side effects commonly caused by chemotherapy for patients with small-cell lung cancer (SCLC). Unfortunately, preserving blood cells didn't lead to any measurable survival benefit.

G1 Therapeutics isn't going to let lack of a survival benefit stop it from submitting an application to the Food and Drug Administration, but it could stop the FDA from granting trilaciclib an approval. G1 Therapeutics has enough cash to fund operations for a couple more years, but the stock still isn't worth the risk right now.

A person in a lab coat with goggles and a face mask examining a flask with liquid in it.

Image source: Getty Images.

2. UroGen Pharma: Sparing kidneys

Getting drugs into the urothelial tract isn't easy, and that makes treating bladder cancer with surgical removal more common than most other types of solid tumors. Urothelial tumors aren't easy to reach with a scalpel, though, and around 78% of patients with low-grade upper tract urothelial cancer (LG UTUC) end up losing a kidney as part of their treatment regimen.

UroGen's lead candidate, UGN-101, is an old chemotherapy drug called mitomycin reformulated as a special liquid that thickens into a gel when heated to body temperature. This allows urologists to treat LG UTUC with a standard catheter that injects UGN-101 into the bladder, instead of with dangerous surgery.

Slowly releasing mitomycin at the place it's needed appears to work well. In a phase 3 trial, 71 patients were treated with UGN-101 six times over six weeks then evaluated four to six years later. An impressive 59% of patients produced no sign of cancer at the follow-up.

It's important to point out that it didn't matter if their tumors were resectable or not, which gives UGN-101 a pretty good chance to earn approval to treat the relatively small population of LG UTUC patients. A similar treatment, UGN-102 is in mid-stage studies for the treatment of a far more common form of bladder cancer, and it appears to work even better than its predecessor.

At its current cash burn rate, this company will probably need to raise capital with a dilutive share offering before we know if the FDA will approve UGN-101.

There's a lack of available treatments outside of dangerous surgical resection, and that makes approval for UGN-101 seem likely. It also means this biotech stock has a pretty good chance of bouncing back.

Three people in lab coats and safety goggles working in a lab.

Image source: Getty Images.

3. Kiniksa Pharmaceuticals: Inflammation suppression

Pericarditis, or inflammation of the tissue that surrounds the heart, happens to around 1 million Americans each year, usually in response to a viral infection. It's usually treated on an outpatient basis, but some patients experience a dangerous accumulation of fluid between the pericardium and the heart.

Roughly one-fifth of people who experience pericarditis become chronically affected, and Kiniksa Pharmaceuticals has aimed its lead candidate, rilonacept, at this underserved population. You may recognize rilonacept as Arcalyst, an FDA-approved drug discovered and developed by Regeneron (REGN -0.11%) for the treatment of another rare autoimmune disorder called cryopyrin-associated periodic syndromes.

Kiniksa licensed rilonacept from Regeneron and owes the big biotech up to $27.5 million in milestone payments plus half of any profit the drug generates. The next candidate in the company's pipeline is a rheumatoid arthritis candidate that AstraZeneca's (AZN -0.67%) placed on a back burner called mavrilimumab.

Rheumatoid arthritis data from mid-stage studies with rilonacept were good but not good enough to compete with available treatments. Kiniksa will pay for the development of mavrilimumab for a rare autoimmune disorder called giant cell arteritis.

Kiniksa may find it relatively easy to develop its in-licensed drug candidates, but there's probably a reason their owners haven't bothered. Even if approved, the odds of Kiniksa producing a significant profit from these rare-disease indications are pretty slim.

Not looking too good

Kiniksa lost a whopping $103 million in the first half of 2019 and will probably be the first company on this list to raise capital with a dilutive share offering. That makes it even less likely than G1 Therapeutics to produce gains for your portfolio.

I won't call UroGen a buy until we see more data from UGN-102, but this stock is clearly worth a closer look.