Over the past couple of decades our most profitable sector has been biotech stocks. We use a process that has been refined over the years. The analysis is complex and time consuming, but worth the effort, asserts small cap expert Bill Mathews, editor of The Cheap Investor.

We evaluate the company’s management and products and its collaborations and licensing agreements with major pharmaceutical firms. We review the institutions that own blocks of shares and the company’s financial health. All these factors are important elements of the potential success of that company.

Of course, the key to almost any stock move is news. And news is especially important for development-stage biotechs. Good news can send the stock skyrocketing, and bad news can cause it to plummet.

Intec Pharma Ltd. (NTEC) focuses on developing drugs based on its proprietary Accordion Pill platform technology in Israel.

Its Accordion Pill is an oral drug delivery system that is designed to enhance the efficacy and safety of existing drugs and drugs in development by utilizing a gastric retention and specific release mechanism.

The company's lead product candidate is Accordion Pill Carbidopa/Levodopa (AP-CDLD), which is in a Phase 3 clinical trial for the treatment of Parkinson's disease symptoms. It is also developing Accordion Pill Zaleplon (AP-ZP) that is in a Phase 3 clinical trial for the treatment of insomnia.

Accordion Pill has completed a Phase 1 clinical trial for the prevention and treatment of gastroduodenal and small bowel Nonsteroidal Anti-Inflammatory drug induced ulcers.

The Accordion Pill platform with Cannabidiol and 9-Tetrahydrocannabinol, (AP-CBD/THC) is in a Phase 1 clinical trial for the treatment of various indications, including low back neuropathic pain and fibromyalgia.

In April, Intec closed an offering of 6.75 million shares at $5.25 per share for gross proceeds of $35.4 million. The company has a decent balance sheet with about $43 million ($1.65 per share) in cash, not including that April underwriting for $35 million. Book value is $1.87 per share, and Intec has no debt.

The stock has fallen about 50% from its 52-week high of $9.45 last October. Good news about any of its FDA trials could move the stock considerably higher.

Subscribe to Bill Mathews' The Cheap Investor here…