Before we ring in 2020, December will be ripe for swings in biotech stock prices. 2019 started strong, waned, and then regained momentum amid a slew of successful clinical trial results, several acquisition announcements, and positive drug approval decisions that came often months ahead of the U.S. Food and Drug Administration's own deadlines.

Additionally, the looming unknown of who will be the next head of the FDA was answered when President Trump nominated Dr. Stephen Hahn this week.

Drug capsule open with dollar signs spilling out.

Image Source: Getty Images.

What should investors look for from now until year-end? Clinical trial results, and lots of them. But first, a word of caution.

On Dec. 3, Cara Therapeutics (CARA 12.33%) and Protagonist Therapeutics (PTGX 2.64%) both announced positive phase 2 clinical trial results. Despite the company's drug candidate showing a statistically significant improvement in the severity of itching for patients with chronic kidney disease, Cara's stock dropped roughly 30%. Why? Investors expected a greater degree of benefit compared to placebo in the 240-patient trial.

On the flip side, Protagonist presented positive preliminary phase 2 clinical trial results for its drug PTG-300 as a treatment for transfusion-dependent beta thalassemia, and the company's share price skyrocketed 80% before retreating to "only" a 60% gain.

With this backdrop of divergent stock reactions to two positive midstage clinical trials, let's move on to what lies ahead.

Pivotal phase 3 trial results expected soon

Athenex (ATNX) and Biohaven Pharmaceuticals (BHVN) notified investors that results from pivotal trials will come before the end of the year.

Athenex previously hailed a successful phase 3 clinical trial in breast cancer for its oral version of paclitaxel, a decades-old, widely used chemotherapy traditionally given by infusion. However, details were scant. Investors should get more precise data when the results are presented at the San Antonio Breast Cancer Symposium next week. An oral form of paclitaxel could dramatically improve convenience for patients by eliminating the need to visit a clinic to receive the infused drug.

Biohaven plans to announce pivotal phase 2/3 trial results for its inhaled migraine drug vazegepant. But that's not all. The company also stated that it could announce phase 3 results in either December or early 2020 with its oral migraine drug called Zydis. Both work by interacting with a receptor in one of the key pain pathways. While this is arguably a crowded field, more effective treatment options with fewer side effects will be welcomed by the millions of people worldwide who suffer from migraines.

Phase 2 clinical trials to report outcomes

Cystic fibrosis drug developer Proteostasis Therapeutics (PTI) and cancer company Puma Biotechnology (PBYI 0.34%) plan to unveil data on their respective midstage trials. Faster-than-expected enrollment drove Proteostasis to move up the timing for phase 2 results to this quarter instead of next year. The trial focuses on either two or three of the company's drugs in combination as a treatment for cystic fibrosis patients with certain known mutations.

Puma's lead drug Nerlynx garnered FDA approval in 2017 as a treatment to extend disease-free survival for breast cancer patients following prior therapy. Puma continues to invest in Nerlynx by conducting trials in other cancer settings. As highlighted in its third-quarter earnings release, data from the phase 2 control trial and the phase 2 summit basket trial will be announced by year-end. The basket trial includes patients with a specific gene mutation irrespective of the location of the cancer such as breast or stomach. This could increase the variety of cancers against which Nerlynx could be used.

Early-stage results with stock-moving potential

Neurodegenerative disease-focused Alector (ALEC 9.07%) and gene therapy company Rocket Pharmaceuticals (RCKT 7.82%) plan to unveil early clinical results shortly. Alector presented phase 1 data with its Alzheimer's disease antibody drug AL002 on Dec. 6, during the Clinical Trials in Alzheimer's Disease conference being held in San Diego. Similarly, Rocket's third-quarter earnings release touted new data by year-end from its gene therapy RP-L102 using a new process that eliminates the need for using cytotoxic drugs to precondition the patients. The initial indication is Fanconi anemia, a rare genetic anemia. Rocket further expects to report RP-L201 data in two patients with the rare disease leukocyte adhesion deficiency-I.

FDA Approved stamp lying on its side.

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Will the FDA approve these drugs by the end of the year?

New drug applications from Allergan (AGN), Amarin (AMRN -2.92%), and Intra-Cellular Therapies (ITCI 1.36%) remain piled up on the desks of FDA reviewers with deadlines toward the end of December. Recently, the FDA approved several drugs, including sickle cell disease drugs from Global Blood Therapeutics and Novartis, months ahead of their deadlines. The stocks of Amarin and Intra-Cellular will likely respond more positively to approvals than will Allergan's simply because of its size -- the approvals will be far more meaningful to the smaller companies.

Biotech investing is fraught with risk, and even company-pronounced "positive results" can be deemed failures. The payoff for the risk could be dramatic swings in valuation that could boost your portfolio as 2019 draws to a close.