Among the winners in Tuesday’s early trading are Neurocrine Biosciences (Nasdaq: NBIX), USEC (NYSE: USU) and Capstone Turbine (Nasdaq: CPST).

Neurocrine’s Large Opportunity

When it comes to picking biotech stocks, it helps to focus on companies seeking treatments for fairly common ailments that lack any rival cures. That’s why shares of Neurocrine Biosciences (Nasdaq: NBIX) are up more than +30% today: its “Daisy-PETAL” drug, which treats endometriosis, just showed strong efficacy in Phase II clinical trials.

#-ad_banner-#Endometriosis causes some women to develop a uterine lining outside the womb, and that usually leads to miscarriage. The precise size of the potential market is hard to quantify, but could well be in the tens or even hundreds of millions of dollars (in terms of revenue). As with many biotech stocks, more hurdles remain. First, Neurocrine will need to find a well-heeled partner to fund further development and eventual marketing. Second, the company needs to show similarly robust clinical data in Phase III trials. Many drugs look very promising in the smaller Phase II trials, but problems can then appear in the larger Phase III trials.

Action to Take –> This is a truly promising development for Neurocrine, and the company’s $200 million market capitalization greatly discounts the potential revenue opportunity. But we are still several quarters away from Phase III trial results. A large partnership agreement stands as the next near-term catalyst. Shares should be bought in advance of such an agreement.

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Uranium Processor Higher after Equity Investment

Shares of USEC (NYSE: USU) are up nearly +20% after the uranium processor secured an equity investment from Japan-based Toshiba and privately-held Babcock & Wilcox. Those two firms are seen as leading players in an expected revival for nuclear power plant construction in the United States. If and when they start to build new plants, they’ll need to line up supply of uranium. USEC will use the funds to expand its roster of highly-efficient centrifuges used to enrich uranium.

USEC will garner up to $200 million in investments from the entities. The company had scant ability to expand on its own and build expensive new manufacturing facilities, with more than $500 million in debt and around $30 million in cash. USEC could get another boost if the U.S. government also provides backing funds to develop a new processing plant. USEC failed to win a recent loan guarantee, but still may secure one through another application process.

Action to Take –> The Obama administration is expected to throw even more weight behind efforts to jumpstart the nuclear power industry. If a number of newly proposed plants get government loan guarantees, then USEC is likely to see strong demand for its enrichment capabilities. Analysts think the company can sharply boost profits in 2011, and if this morning’s equity investment yields further processing capacity, per-share profits could exceed $1 in a few years. Not bad for a $5 stock. Despite the sharp gain, this stock should move on to more radars in the days to come.

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Micro Turbines Still hold Promise

In the early part of the last decade, investors saw great promise in the deployment of small turbines that could act as local power plants for large corporate campuses or neighborhood subdivsions. Capstone Turbine (Nasdaq: CPST) was the hot name in the space, and its shares pushed toward the $100 mark at their peak. But the entire concept proved to be a bust, and companies like Capstone simply burned through round after round of investors’ money. Shares eventually fell below $1.

But can this story have a second life? Despite the serial disappointments, the company has made steady efficiency advances with its turbines, which is sparking renewed demand. Sales for the fiscal year that ended in March are expected to show a +40% gain to around $63 million. Sales have risen at least that much in each of the last two years as well.

Uncle Sam may help sales to keep rising at a strong clip. The U.S. Department of Energy (DOE) is providing capital that will help Capstone to develop its most efficient micro-turbines yet. That news is pushing shares up +3% in Tuesday trading.

Action to Take –> The Obama administration appears committed to supporting any nascent energy technologies that promise higher efficiency and reduced emissions. We may see more positive announcements to come. But Capstone Turbine is likely going to keep needing more equity capital, which will limit upside. But this may be worth taking a small flyer, despite its speculative nature.