Motley Fool Article

https://www.********.au/2020/10/05/why-i-think-these-small-cap-asx-shares-will-perform-in-2021/

https://sydneyonlinenews.com.au/why-i-think-these-small-cap-asx-shares-will-perform-in-2021-motley-fool-australia/

Why I think these small cap ASX shares will perform in 2021

The ASX is littered with lots of companies that show potential to become the next market darling. While I mostly invest in the mid-to-large cap space, I do look for small cap ASX shares that could deliver strong returns.

Every company has a story to sell. The trick is to identify value and opportunities. Researching your chosen business is a great start, but it also pays off to look at its rivals and the macro-environment.

Here are my top 2 small cap ASX shares that I think will perform in 2021.

Botanix Pharmaceuticals Ltd (ASX: BOT)

Botanix is a synthetic cannabinoid pharmaceutical company that focuses on dermatology and antimicrobial products.

Pipeline products include the BTX 1801 gel which prevents surgical site infections by killing bacteria during surgery incisions. Currently in a phase 2a study, Botanix aims to combat the growing global antibiotic resistance that affects millions each year.

In April, Botanix received a major boost from the United States Food and Drug Administration (FDA). The company’s flagship BTX 1801 received a Qualified Infectious Disease Product status. The incentivised status grants an additional five-year regulatory exclusivity, meaning generic products cannot enter the market. Furthermore, Botanix is eligible for a priority FDA review, cutting the standard review period to 6 months from the original 12 months. Furthermore, fast-track designation enables Botanix to have more frequent communication with the FDA during the drug development and review process.

At the time of writing, the Botanix share price is trading at 10 cents, up 7.5% for the day. With a market capitalisation of $97 million, if the company can perform to market expectations, its share price will soar.

Botanix could be a game-changer for infection preventative diseases. I would keep an eye on the medical company as a speculative buy.