With the top stocks in the market exploding in price due to the recent rally, we wanted to scan across our research universe for some lower priced names that could have significant upside. As we have mentioned in the past, many Wall Street firms are hesitant to cover stocks priced less than $5. They either feel that they are too risky, or the fact that they are often not marginable does not provide any additional income.

For doubters of lower priced stocks, it’s important to remember Apple once traded in the single digits. As did Citi, Bank of America, Ford and many other top names Just because a stock is in the single digits doesn’t mean there isn’t tremendous upside potential. We always stress that low priced biotech stocks are extremely risky and only suitable for very aggressive accounts.

We have provided an analyst summary on each to show how Wall Street sees the potential upside, and then it has been compared to the Thomson Reuters consensus estimate. Here are five biotech stocks trading at or under $5 which could have huge upside if developments materialize in their favor.

Avanir Pharmaceuticals (NASDAQ: AVNR) got hit hard when their drug candidate AVP-923 failed to do better than a placebo in a key mid-stage multiple sclerosis trial, disappointing investors and knocking shares down more than 50%. The drug is already being sold as Nuedexta and that has been a success. Nuedexta double-digit sequential revenue growth shouldn’t be ignored — particularly if growth continues again this quarter. Since other biotechs are being acquired at up to 10 times sales, an argument can be made that Avanir’s current market cap of $600 million reflects only Nuedexta. Especially if a larger company wants to acquire them. With a big Intellectual Property court verdict coming, there could be a big move on the binary event. The Piper Jaffray price target on the stock is $13, and they rate the stock Overweight. The Thomson/First call estimate is at $8.13. Avanir was trading Friday at $4.16, down $0.06.

Dynavax Technologies Corp. (NASDAQ: DVAX) top drug Heplisav, a hepatitis B vaccine, may make for a very solid play. The vaccine has been rejected twice by the FDA, but a third look may be the charm. The company issued a secondary offering last fall to raise $125 million to fund HBV-23, a massive phase 3 trial consisting of 8,000 patients. If approved, Heplisav could generate peak sales of $775 million and compete directly against GlaxoSmithKline’s (NYSE: GSK) Engerix-B and Merck’s (NYSE: MRK) Recombivax HB. At less than $2 per share, there’s simply not much downside to Dynavax stock, although it has considerable upside potential on any positive updates about Heplisav. The Jefferies rates the stock a Buy and has a price target  posted at $3, and the consensus is much higher at $4.50. The stock closed Friday at $1.86, down $0.05.

Inovio Pharmaceuticals (NYSEMKT: INO) just bolstered their balance sheet with a secondary offering. The company specializes in immunotherapy vaccines that target cancer, HPV, and other diseases by provoking an immune system response with synthetic DNA. The vaccines are delivered into the patient’s body via Inovio’s proprietary electroporation technology, which uses brief electrical pulses to boost cellular intake. The company’s  most advanced treatment, VGX-3100, has entered phase 2 trials as a therapeutic vaccine for cervical dysplasia, the leading cause of cervical cancer. VGX-3100 targets types 16 and 18 of the human papillomavirus (HPV), which has been implicated in 70% of cervical cancers. Piper Jaffray has a $5 target for the stock. The consensus is at $3.20. The stock finished Friday at $3.29, down $0.13.

Protalix BioTherapeutics. Inc. (NYSEMKT: PLX) is another name that could be a huge home run. The company currently has an FDA approved drug, and is in the process of developing their ProCellEx platform. ProCellEx is a modular cell culture platform capable of producing various biological drugs from plant cell lines; the current status quo in the industry utilizes Chinese hamster ovary, or CHO, cells.  Protalix owns a proprietary platform — and numerous patents surrounding the processes involved — that could provide a way around the patent protection of numerous blockbusters, and offers several compelling advantages over the industry standard. The J.P. Morgan price target for the stock is $7, and the consensus is at $6.40. The stock ended Friday at $4.83, off $0.04.

Threshold Pharmaceuticals’ (NASDAQ: THLD) lead product is TH-302, which is a DNA alkylator being targeted at a number of therapies, including pancreatic cancer. Currently, Threshold and its collaborative partner Merck KGaA are running a global phase 3 trial, known as Maestro, to assess the effect and safety of TH-302 in combination with Gemzar on advanced-stage but treatment-naive patients. The Phase 2b results of this combo demonstrated a 41% reduction of risk for disease progression or death and improved 12-month overall survival to 38% versus 26% in the placebo arm. Stifel Nicolaus likes this stock and has a $12 price target, and the consensus number is right in line at $12.70. The stock closed at $4.83, down $0.04, on Friday.

With binary events around the corner, these biotech stocks under $5 have a decent shot for success. Again, we caution that all of these stocks could potentially have huge downside if their trials fail or if capital runs out. So these stocks are only suitable for the most aggressive trading type accounts – no widows and orphans funds.

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