The biotechnology industry is a sector that lives by its own rules. You can forget about fundamental analysis — investors either don’t know or don’t care. No matter how great or how terrible a biotech firm’s financials are, there’s a strong probability that it will have little to no bearing on its market valuation.

That wouldn’t be the case for most other industries. But biotech is radically different. It’s not unheard of at all for companies to run wildly negative margins and dive millions of dollars into debt. The payoff is in the promise. In other words, Wall Street is willing to forgive biotech, so long as momentum in terms of product pipeline is maintained.

No wonder why earnings reports for biotechs are make-it-or-break-it affairs. Positive clinical trials keep the allure of the stock alive and well. Failure to impress, though, leads to quite the opposite reaction. And there’s simply no way outside of insider information to predict how a biotech will perform against those trials. It’s a crapshoot that understandably scares off much of the retail investment community.

Nonetheless, the opportunity to snag the next big name in biotech keeps the industry in business. While there’s absolutely no guarantees, Cesca Therapeutics (NASDAQ:KOOL) offers a compelling idea within this volatile sector, and in particular, for contrarian traders.

According to their profile, Cesca is “engaged in the research, development, and commercialization of cell-based therapeutics for use in regenerative medicine.” Their business focuses on three main markets — cellular therapeutics, medical/diagnostic devices, and cell manufacturing and banking. Each of these units leverage exciting technologies with practical platforms that are designed to quickly deliver therapeutic solutions.

Cesca Therapeutics Offers a Highly Speculative Opportunity - KOOL Chart

KOOL stock currently stands at several cents under $3. But in 2014, shares momentarily challenged the $65 barrier. That’s a massive erosion of more than 95% of market value. Of course, that’s not a good thing — there’s always a reason why stocks lose money. Multiply that sentiment by a hundred when the market capitalization is nearly eviscerated.

However, KOOL has shown spurts of impressive gains following an extended period of losses. It’s not unusual to see high double-digit moves in a single based off of a favorable clinical trial or some other fundamental catalyst. Interestingly, since the beginning of October, KOOL stock is down 29%. Could another rally be on its way?

While this is an extremely speculative idea, the possibility is certainly there. The high for the year is $7.39, which is almost three-times the current market value. Because of its high-risk, high-reward dynamic, I wouldn’t go overboard. Still, KOOL has a chance — and that’s often what biotech firms rely upon.