The second half of the year could provide some solid wins for investors in the cancer therapeutics market. In recent years, Wall Street has flocked to many of these biotechnology companies because of their potential to deliver cutting-edge treatments and generate long-term returns.

As cancer incidence rates continue to climb annually, there is a huge need for effective treatments. Forecasters anticipate the cancer therapeutics market will reach $180.2 billion by 2026, up from $98.9 billion in 2018. Investors who have cash on the sidelines may want to consider these two promising cancer stocks.

Doctor or Scientist looking a Leukemia cells

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Xencor

Xencor (NASDAQ:XNCR) is an under-the-radar company that's poised for a share price run-up in the coming months after a 7% decline year to date. It is developing and co-developing monoclonal antibodies and protein therapeutics to treat a variety of cancers and autoimmune diseases.  

Its approach to design differs from traditional methods, which rely on a segment of antibodies that interact with target antigens -- substances that stimulate an immune response. Xencor's innovative XmAb technology gives it greater control of antibody structures, allowing them to interact with multiple cell segments and enhancing the performance of a treatment.

The company has a large pipeline of XmAb antibody drug candidates, including one that it developed with partner Alexion Pharmaceuticals that has earned FDA approval. One treatment in particular may drive the stock higher in the coming months: Xencor and partner MorphoSys are awaiting word from the U.S. Food and Drug Administration (FDA) about their Biologics License Application for tafasitamab as a treatment for patients with relapsed or refractory diffuse large B cell lymphoma (DLBCL).  

The market for DLBCL treatments is expected to reach $4.3 billion by 2022. The FDA has set tafasitamab's PDUFA date for Aug. 30 -- an approval would allow Xencor to create additional revenue streams from royalties.  

Xencor's partnerships are key to its business model, improving its cash position and allowing it to fund its research programs. It has partnered with many other notable companies and institutions, including Amgen, Aimmune Therapeutics, Gilead Sciences, the National Institutes of Health, and Vir Biotechnology.

The company reported first-quarter revenue of $32.4 million and a net loss of $8.1 million, or $0.14 per share, which beat analysts' consensus estimate by $0.28 per share.  

Financially, the company is in a healthy position, with cash and investments totaling $610 million on the books. That should be sufficient to cover operations until 2024. Xencor's pipeline and XmAb technology have Wall Street bullish on the stock, and roughly 92% of its shares are held by institutional investors.

While the stock is nowhere near its 52-week peak of $46.33, an approval of tafasitamab could drive it higher. Xencor boasts a price-to-book ratio of 3, which is undervalued relative to the biotech sector's average (3.91) and peers such as CytomX Therapeutics (5.61) and MacroGenics (7.87). This stock has plenty of upside based on its deep pipeline and strong partnerships with leading biotechnology firms.  

Spectrum Pharmaceuticals

Though Spectrum Pharmaceuticals (NASDAQ:SPPI) is down 8% year to date, it offers plenty of promise for investors. The small-cap biotech is working on three investigational therapies to target various forms of cancer.

The one that offers the most promise thus far is Rolontis, a treatment for chemotherapy-induced neutropenia, or abnormally low levels of white blood cells. The condition increases the risk of infections and hospitalizations and can require interruptions in chemotherapy treatments.

What's exciting about Rolontis is that it has the chance to enter a global market worth more than $4 billion. It has a promising long-acting growth factor protein known as G-CSF that provides an enhanced therapeutic effect and reduces the need for repeated treatments, helping patients to recover from neutropenia faster.  

In the G-CSF market, there is currently one approved long-acting treatment -- from Amgen -- and three biosimilars marketed by Coherus BioSciences, Mylan Pharmaceuticals, and Sandoz. Spectrum believes that Rolontis could offer an alternative to those treatments. Management is optimistic that the strong clinical data from Phase 3 clinical trials could lead to an approval, making this the first novel product of its type to come to market in more than a decade. Spectrum has submitted a Biologics License Application for Rolontis to the FDA and expects to receive a decision by Oct. 24.  

One of Spectrum's other investigational therapies, Poziotinib, shows promise as a treatment for non-small-cell lung carcinoma (NSCLC). The novel therapy uses tyrosine-kinase inhibitors to target specific gene mutations to treat metastatic NSCLC. This area could be an opportunity for growth for Spectrum, as there are no FDA-approved therapies as yet that target the specific mutations Poziotinib goes after. Spectrum expects to deliver top-line results from one cohort of its Phase 2 trial of Poziotinib fairly soon. Any positive news could drive the stock higher and provide support for a potential New Drug Application submission.  

Large investors are bullish on the stock, with 74 institutional holders increasing their positions in the most recently reported quarter. Spectrum has a price-to-book ratio of 2.43, which is below average in the sector and well below peers such as Madrigal Pharmaceuticals (4.16) and Progenics Pharmaceuticals (11.60). The stock is nowhere near its 52-week peak of $10.57, and has room to rise if the company comes through with positive clinical trial data or an approval of Rolontis.