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Two promising healthcare stocks with market capitalizations under $500 million

The healthcare sector, just like its younger biotech sibling, is inherently volatile—swaying and sashaying to the varying tune of investor sentiment, consumer trends, R&D updates and the launch of new products in the market.

However, this high risk and volatility can be mitigated by healthcare companies through constant innovation and increasing the pace of product development in their respective niches, as a Jefferson report noted.

Indeed, it is what’s key in positive price corrections in the sector. "If you look at individual names in the health-care market, there are certainly opportunities there," Gina Sanchez, founder of asset management company Chantico Global, told Talking Numbers. "We might see some bottoming in the biotech industry. We're finally seeing R&D pick up and some new drug approvals coming on to the market. That would be positive," she added

Here are two must-buy innovative healthcare companies in their niche with the most upside potential:

1. BioCorRx, Inc. (BICX) has a current share price of $0.11. No price target is available for the company yet online, but the volume it has been trading(157,211) for its size should give you an idea of how the company fares against competitors in its relatively small niche.

The company’s lead product, a biodegradable Naltrexone time-release implant, which it uses in its addiction rehabilitation Start Fresh Program, holds a huge promise in addressing America’s growing alcoholism and prescription pill addiction problem. Naltrexone, a generic drug approved by the FDA, has a high success rate in curbing alcohol and opioid cravings.

In terms of expansion potential, the company is growing at a dizzying pace with many finalized licensing and distribution agreements across the United States. Their recently completed agreements marked the future openings of various Start Fresh Program clinics in Washington D.C., Maryland, Virginia, West Virginia, North Carolina,and Georgia.

“We will continue to push forward with setting up distribution for the Start Fresh Program across the U.S. The exciting part is that the expansion is taking place mainly with current distribution partners who are already seeing success in their first few months. Their willingness to invest and expand further is a testament to the success of the program to date” said Brady Granier, COO of BioCorRx Inc.

2. Dynavax Technologies Corporation (DVAX) trades at $1.62, up by 1.43 percent from its previous close. The company, which Forbes.com listedas one of theFive Small Biotech Stocks Analysts Think Will Triple, was projected to increase its yields by as much as 208 percent when its stock price hits $5.

Dyvanax has five products in the pipeline for the treatment of inflammatory diseases, infectious diseases and cancer. The company is currently conducting phase three of its clinical study on its lead product candidate HEPLISAV-B, a hepatitis B drug that could stimulate a strong immune response in afflicted individuals after two administrations.

Market Momentum

The stock market started bouncing back later in May with small-cap stocks leading the way, Reuters reported. Nasdaq in particular was lifted by a biotechnology shares rally.

On Monday, biotech and healthcare stocks indices continued to rise, allowing US Markets yet again to finish on a positive note. Investor Edge noted that the Nasdaq Composite rose by 0.59 percent to 4,321.40, followed closely by the Dow Jones Industrial Average which rose by 0.52 percent to 16,924.28 and the S&P 500 which was up by 0.46 percent to 1,949.44.

Meanwhile, the S&P 500 health Care Sector Index, closed at 697.40, declining by 0.10 percent. This doesn’t change the fact, however, that the index has risen by 3.94 percent for the past month.