The biotech industry has seen a turnaround in the second half of 2018 after a slightly slower first half. In the recent past, the sector witnessed some encouraging news in the form of positive data read-outs on key pipeline drugs as well as favorable regulatory updates, especially by the small biotech companies.

The Medical – Biomedical and Genetics industry has grown 1.9% in the past month, outperforming the S& P 500 index’s gain of 1.7%. The industry also features among the top 37% of the 255 Zacks-Ranked industries.

We believe that successful innovation, strong clinical study results, frequent FDA nods, growing demand for drugs especially for rare-to-treat diseases, an aging population and increased health care spending are a few key factors that should keep the sector on track through the rest of the year. Importantly, merger and acquisition (M&A) activity is rising with the tax reform in place, which obviously adds an impetus to any sector.

Meanwhile, with big pharma and biotech companies like Merck & Co, Inc. (MRK – Free Report) , Pfizer, Inc. (PFE – Free Report) , Amgen, Inc. (AMGN – Free Report) and others in trouble due to generic competition among key drugs, drug pricing issues and an escalating rivalry, the focus is gradually shifting toward smaller innovative biotechs. These companies are in the spotlight on account of important advances made in clinical studies on their experimental drugs and are fast nearing an FDA/EU approval. These stocks are also hot targets for acquisitions.

Taking these factors into account, we can easily consider some small stocks to be added to investors’ portfolio from the biotech industry. We will thus highlight three worth-picking biotech stocks, share prices of which, have almost doubled over the past month.

ProQR Therapeutics N.V. (PRQR – Free Report)

The Netherlands-based biopharmaceutical company’s share price has surged in the past week following the company’s release of encouraging top-line results from an early-stage phase I/II study, which evaluated its pipeline candidate QR-110 for an eye disorder — Leber’s congenital amaurosis 10 (LCA10). Interim data from the phase I/II program showed that treatment with QR-110 led to a rapid and sustained progress in vision, measured by visual acuity and the mobility course performance. The company currently carries a Zacks Rank #3 (Hold). The stock has skyrocketed 150.3% in the past month.