Most of the major mega cap biotechnology companies have reported earnings and the results almost across the board have been very good. The problem for many investors is many of the top names have become very expensive, so it is extremely difficult to take any sort of substantial position in the stocks. While it is clearly better from a risk tolerance standpoint to own the big market leaders, it is not always feasible for a retail investor.

The analysts at J.P. Morgan have three top names to buy that may be just what the doctor ordered when it comes to serving up some big gains. With three top small cap names to buy, all with catalysts that could drive outperformance, investors are given the shot to swing for the fences. It is important to remember that small cap biotech investing is only suitable for account with a very aggressive risk tolerance bias. Not for conservative accounts where preservation of capital is priority number one.

Here are two top names to buy with huge potential upside and another that also has tremendous potential.

InterMune Inc. (NASDAQ: ITMN) got hit last week when a competitors Phase III data on similar top pipeline candidate was supposedly leaked. Top Wall Street biotech firm Summer Street Research immediately came out and said InterMune weakness is a buying opportunity and expects the ASCEND trial of pirfenidone for idiopathic pulmonary fibrosis to be successful when the data is top lined. InterMune is also one of its top picks for 2014. The J.P. Morgan team concurs and also continues to believe there is a high probability of success for the Phase III ASCEND trial. Data is expected in the second quarter, so current entry timing may be good. The J.P. Morgan price target is a strong $23. The Thomson/First Call estimate is at $17.43. InterMune was trading mid-day at $11.26. A move to the target would be a gigantic 102% move for shareholders.

NPS Pharmaceuticals Inc. (NASDAQ: NPSP) could have a solid year. CEO Francois Nader told Wall Street analysts to expect an FDA advisory panel to be held for its leading drug candidate Natpara before the October Prescription Drug User Fee Act date. If the panel is positive and the drug is approved, NPS will be ready to launch the drug before the end of the year. NPS also is gearing up to start a Phase IIa study of NPSP790 in autosomal dominant hypocalcemia later this year. The J.P. Morgan price target is $40, and the consensus is at $39.27. NPS is trading at $33.30.

Protalix BioTherapeutics Inc. (NYSE: 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 its 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 it offers several compelling advantages over the industry standard. The J.P. Morgan price target is $7, and the consensus target is $6.20. The stock traded mid-day Thursday at $4.21. A move to the target would be a 65% gain for investors.

While biotech investors always run the risk of clinical failure, the J.P. Morgan stocks to buy all have an interesting story that may prove to be outstanding if the upcoming binary events are positive. Again, these stocks are only for very aggressive accounts and are not suitable for conservative investors.

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