The past 18 months have been a roller-coaster ride for the biotech sector.

As measured by the Nasdaq Biotechnology Index, firms in this industry saw their stocks soar in the first half last year, only to enter a collision course that left biotech shares in a 38% decline by this past February.

Now the tide has turned, and the biotech sector is on the rise once again.

But what is the best way to play this opportunity-packed sector? Given the unorthodox nature of this industry, could one of the best investment plays be a company that hasn't even registered any revenue?

Lion Biotechnologies (LBIO) focuses on the development and commercialization of novel cancer immunotherapy products. Its approach is simple: harness the power of a patient's own immune system to eradicate cancer cells.

And Lion's stock is on fire. Shares skyrocketed by more than 43% on Friday, and some analysts expect the stock to nearly double to $16 a share in the next year.

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What is driving the stock? Certainly not Lion's revenue stream.

So far, the company hasn't had any revenue, nor has Lion announced any profits yet, either. Instead, news of a new president and chief executive, Maria Fardis, and $100 million raised in capital have been propelling the stock's huge gains.

Most recently, she was chief operating officer at Acerta Pharma, a company ultimately acquired by AstraZeneca for $4 billion. Fardis was also involved with Pharmacyclics, a company later acquired by AbbVie for $21 billion.

She reportedly helped develop the blockbuster cancer drug Imbruvica. Getting a new leader with such an impressive track record is certainly working in Lion's and investors' favor.

Lion has been making other key hires in the past few months, including Steven A. Fischkoff as chief medical officer in February and Michael T. Lotze as chief scientific officer and vice president of research and development in March.

The company raised the $100 million through a private-placement equity offering. The company issued a combination of 9.68 million shares of common stock and 11.36 million shares of series B preferred stock.

Lion says it expects to invest between $30 million and $35 million in R&D and operations this year. 

A private offering of shares will help collect that money.

After the capital raise is completed, Lion should hold nearly $200 million in cash on its books. This should be enough to bankroll its operations as it continues to advance its product compounds down the regulatory pathway.

And the products that Lion is developing show much promise for the company's bottom line.

Lion's lead product candidate is an adoptive cell therapy to treat refractory metastatic melanoma. The company is enrolling patients in a Phase 2 study of this drug.

In addition, Lion plans to initiate a Phase 2 trial for another drug to treat cervical cancer and head-and-neck squamous cell carcinoma by the end of the year.

With the stock having gained 12% already this year after a relatively flat 2015, some question whether Lion is moving too fast too soon.

The fact is, drug development is a risky business. There are no assurances that a drug or a molecule will succeed.

That is why it would be smart for investors to allocate a small part of their portfolios to high-risk, high-reward bets such as Lion, ensuring protection from big drops, while retaining the opportunity to profit from gains.

The treatments that Lion has in its pipeline make this tiny biotech company look like an attractive takeover target. If any big pharmaceutical companies purchase Lion for billions of dollars, investors will be laughing all the way to the bank.

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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.