If you're looking for stocks that can rocket higher overnight, the biotech space is a good place to start. Hardly a week goes by without big gains from at least a few members of this industry, which produces about one new publicly traded company per week.

If you haven't been able to stay on top of them all, we've got you covered. Read on to see why investors pushed these three biotech stocks a lot higher last week.

Company (Symbol) Price Change During Week Ended Jan. 15, 2021  Market Cap
Lexicon Pharmaceuticals (LXRX 0.62%) 79% $972 million
NuCana (NCNA -4.53%) 45% $358 million
Aldeyra Therapeutics (ALDX 0.25%) 30% $519 million

Data source: Yahoo! Finance.

1. Lexicon Pharmaceuticals

This company's lead drug, sotagliflozin, earned approval in the EU a couple of years ago, but the FDA raised concerns that kept it from reaching U.S. pharmacy shelves. Lexicon Pharmaceuticals stock jumped last week when the company told investors the FDA is willing to review a new application supported by results from the Soloist and Scored trials for a much larger indication than type 1 diabetes, as originally planned.

Smiling scientist

Image source: Getty Images.

Sotagliflozin is a drug that reduces blood sugar concentrations for diabetes patients by allowing glucose to pass through the kidneys and exit the body via the urinary tract. Cardiovascular disease is the leading co-morbidity for millions of type 2 diabetes patients, and a drug that prevents heart problems for people at high risk could earn billions annually.

The Soloist trial was a long-term outcome study with type 2 diabetes patients who had recently been hospitalized for worsening heart failure and Scored enrolled type 2 diabetes patients who also have chronic kidney disease. Patients treated with sotagliflozin in the Soloist trial were 33% less likely to be hospitalized, or die due to heart failure and there was a 26% risk reduction in the Scored study.

2. NuCana

This clinical-stage biotech is trying to improve on nucleoside analogs, an old class of drugs that jam up the gears of DNA replication for cancer cells and viruses. Shares of NuCana jumped this week after the company reported successful clinical trial results with NUC-3373 and 37 patients with advanced-stage colon cancer.

When caught early, colon cancer is relatively easy to treat, but these were advanced-stage patients who had failed several previous lines of treatment. That's why investors pushed up shares of NuCana after learning NNC-3373 shrank tumors for five patients, including a fourth line patient whose tumors shrank by 40%.

Treatment with NNC-3373 also appeared much easier to tolerate than fluorouracil, the chemotherapy that NNC-3373 is based on. This suggests NuCana will easily be able to produce evidence of improvements in terms of safety and efficacy.

3. Aldeyra Therapeutics

Shares of this small-cap biotech stock jumped last week in response to positive clinical trial results for the company's lead candidate reproxalap. This is an experimental eye drop solution for the treatment of dry eye disease and allergic conjunctivitis. 

Smiling scientist with green beaker.

Image source: Getty Images.

Among the first 23 patients enrolled in the Tranquility trial, those randomized to receive reproxalap experienced significantly less ocular dryness and discomfort than those given a placebo. Beginning in February, the study will enroll about 200 more patients, with overall results expected in the second half of the year.   

Dry eye disease affects around 34 million Americans, and existing treatments don't work for everyone. If Aldeyra can gain a foothold in this space its stock price will rise much further.

More gains ahead?

Aldeyra's developing reproxalap for one of the most competitive corners of the pharmaceutical space, but that wasn't the original plan. In 2019, reproxalap failed to outperform a placebo for underserved patients with a rare cause of eye inflammation, non-infectious anterior uveitis. Before backing Alderya's plan B with your hard-earned money, it's probably better to wait and see how reproxalap measures up at least one of today's popular dry eye treatments in a head-to-head trial.

Before considering NuCana stock, investors should know that the company's first candidate to enter late-stage testing, Acelarin failed to reduce patients' risk of death compared to gemcitabine, the standard chemotherapy Acelarin is based on. Remaining on the sidelines until this company proves its treatments are significantly better than old fashioned chemotherapy is the right move here.

With successful outcome study results, there's a good chance the second sotagliflozin application Lexicon Pharmaceuticals expects to send the FDA can earn approval to prevent a large population of type 2 diabetes patients from succumbing to heart failure. Successfully launching a new heart failure treatment is a lot less predictable than earning approval for one, but right now, it looks like this stock has what it takes to continue climbing.