Biotech stocks can be a lot like lottery tickets: They're worth either a whole lot or almost nothing. It's the appeal of the grand slam, the allure of striking it rich overnight, that makes them such attractive stocks.

Investors in Dendreon (Nasdaq: DNDN) know the siren song of the biotech stock all too well. This stock has become a roller coaster. First, it skyrocketed on its Provenge treatment for prostate cancer, zooming from near penny-stock territory in early 2009 to well over $40 per share.

But in the past few weeks, shares have cratered, losing some 75% of their value.  It seems that sales of the $93,000 Provenge have not been as brisk as imagined, because doctors had to shell out the cost of the treatment and then bill the insurance companies and hope for reimbursement. Despite this issue, management has assured investors that there's still plenty of demand for the drug.

Even with a marketable drug, the biotech has run into trouble -- highlighting how fraught with risk the biotech space is, but also how rewarding it can be when things go right. So with that as preamble, following are six more wild bets on biotech riches.

1. XOMA (Nasdaq: XOMA). An investment on XOMA is a bet on its XOMA 052, a drug that operates again interleukin-1, a pro-inflammatory protein. The company believes that this protein is involved in cardiovascular disease, gout, diabetes, and arthritis. According to the Fool’s Brian Orelli, even though two diabetes trials didn’t go well, the remaining diseases provide large enough markets that XOMA 052 could still be a blockbuster, and with its small market cap, any positive trials could make the stock price soar.

2. Aeterna Zentaris (Nasdaq: AEZS). Aeterna has a deep pipeline. One of its standouts is the fast-tracked perifosine, which is now in a phase 3 trial to treat late-stage refractory colorectal cancer. The European Patent Office has already awarded the company a patent for perifosine in conjunction with antitumor antimetabolites to treat tumors. In the latest quarter, Aeterna also completed phase 3 trials for AEZS-130, its oral diagnostic test for adult growth hormone deficiency, and should shortly file a new drug application. Aeterna also noted that AEZS-120, its oral prostate-cancer vaccine, would be moving into phase 1 trials in 2012. 

3. Zalicus (Nasdaq: ZLCS). The company’s Exalgo pain medication was approved by the FDA last year, and analyst Oppenheimer thinks the drug has the potential to do $250 million to $300 million in annual sales. That type of potential had Oppenheimer assigning the company a $4 price target. Also in the pipe, Zalicus has Synavive, a rheumatoid arthritis drug, and its allergy treatment Prednisporin. The stock is down nearly 50% from its 52-week high.

4. Cell Therapeutics (Nasdaq: CTIC). Investors are watching the company's resubmission of pixantrone to the FDA as early as April 2012 without any further clinical trials. The drug is the company's proposed treatment for non-Hodgkin’s lymphoma, and Cell Therapeutics has been in a contentious situation with the FDA over the drug for a while now, as Brian Orelli explains. The company has also announced positive results for Opaxio, its treatment for malignant brain tumors. With nearly $1.7 billion used in various research efforts since its inception, the company has burned a ton of cash and many investors' dreams. 

5. Ariad Pharmaceuticals (Nasdaq: ARIA). With a market cap of $1.3 billion, Ariad has a huge price tag for a company with essentially no trailing revenue. The company works on cancer treatments through its three primary drugs, ridaforolimus, ponatinib, and AP26113, and also has 13 other drugs in clinical or pre-clinical stages. Of particular importance to the company is ridaforolimus, but it's unclear how much money Ariad would receive if the drug were approved by the FDA, because of the company's partnership with Merck. Despite falling more than 30% from its high, the stock is still up nearly 90% in 2011.

6. Oncothyreon (Nasdaq: ONTY). This biotech is working on an immunotherapy called Stimuvax, which targets the protein MUC-1. The method is similar to what Dendreon does with its own Provenge treatment. With the support of Merck KGaA, the drug is now in a phase 3 trial for lung cancer. The stock is 40% below its highs for the year but is still up over 100% from its 52-week low.

Foolish bottom line
Will these biotech stocks rocket to the moon or crash and burn? So much of the time it's feast or famine with biotech; if you can handicap the stocks and make a profit, then all the better for you. For those who are still interested in a stock with substantial upside without the risk of biotech stocks, download a copy of our special free report, The Motley Fool's Top Stock for 2011.