4 Biotech Penny Stocks to Watch in May 2021
Throughout the last year, investors have been passionately pursuing biotech penny stocks. This was in the hope that vaccine-related innovation would drive these penny stocks up.
Because of this, some biotech penny stocks saw massive surges in prices, while others returned inverse losses. This reflected the risky nature of the biotech industry as a whole. Long approval processes, as well as drug relevance, often cause much volatility in this sector.
The research and development needed for drug approval by the FDA is a long and costly process for companies. A single phase’s success or failure can have a huge impact on a penny stocks valuation and subsequent price movement. Those who take the time to understand how to find penny stocks to watch can use this high volatility to their advantage.
This volatility is only amplified when it comes to biotech penny stocks. When formulating a penny stock watchlist, investors must use partial information to formulate a decision on whether to buy or sell. This can include information such as the previous reputation of a company, the strength of its drug pipeline, and the implication of a product.
With many genetic diseases and age-related disorders affecting people worldwide, there is always innovation being generated in this field. This is what appeals to many when trading penny stocks, and biotech specifically. Experienced biotech investors understand that drug production is a key to finding short and long-term plays.
Biotechnology is a sector that can thrive off an individual product. A single drug has the potential to change the valuation of a company overnight. It’s not always the easiest to predict which penny stocks to buy, but, with proper research, the biotech penny stock sector can be extremely lucrative. Here’s a look at four biotech penny stocks that have been generating a lot of interest.
4 Must Add Biotech Penny Stocks For Your Watchlist
- Obalon Therapeutics Inc. (NASDAQ: OBLN)
- Evofem Biosciences Inc. (NASDAQ: EVFM)
- Novan Inc. (NASDAQ: NOVN)
- Minerva Neurosciences Inc. (NASDAQ: NERV)
1. Obalon Therapeutics Inc. (NASDAQ: OBLN)
An important component of driving investor interest is the future implications of a certain technology or focus. As a company that specializes in the development of medical devices for treating obesity, Obalon Therapeutics does just that. Its key product is a weight loss therapy that utilizes intragastric balloon technology. It works by remotely inflating a medical balloon in the stomach of the patient after it has been swallowed in capsule form.
This global weight-loss solutions company is based out of San Diego and was founded in 2008. Its recent development and marketing of its weight loss products have caught the attention of many. It has increased over 280% this past year alone, with an almost 1000% gain at its peak back in late January.
Recently, OBLN has stated it intends to merge with ReShape Lifesciences Inc. CEO of OBLN, Andrew Rasdal, stated “The merger with ReShape cannot be completed without the approval of each of the proposals being voted on at the special meeting, including approval of the proposed reverse stock split.”
This reorganizational step has resulted in a 30% or so gain this past week. Given this information do you think OBLN should be added to your biotech penny stock watchlist?
2. Evofem Biosciences Inc. (NASDAQ: EVFM)
Another relevant biopharmaceutical company is Evofem Biosciences, a business engaging in the unmet needs of women’s sexual and reproductive health. EVFM develops and commercializes new and innovative products such as Phexxi. Phexxi is a hormone-free vaginal gel used for the treatment of urogenital Chlamydia trachomatis and Neisseria gonorrhoeae infections. This product is made with citric acid, lactic acid, and potassium bitartrate.
EVFM is a relatively new biotech penny stock that is still in its infancy. It was founded in 2007 and has since worked hard to make a name for itself. As of May 12th, the FDA just recently approved the Fast Track Designation of EVO100 for the prevention of urogenital gonorrhea in women. Currently in Phase 3, this drug could have revolutionary changes for the treatment of patients.
CMO, Dr. Kelly Culwell noted, “We are pleased that the FDA has recognized the need for a product such as EVO100 to prevent this common STI, which is increasingly antibiotic-resistant. There are 78 million sexually active women in the U.S. potentially at risk of contracting sexually transmitted infections, including gonorrhea.”
Culwell goes on to state that “Should EVO100 receive FDA approval as a preventive measure, this would be a welcome addition to the physician’s armamentarium in the fight against this growing public health concern.”
As a penny stock under $5, do you think EVFM is on track towards success?
3. Novan Inc. (NASDAQ: NOVN)
When looking into biotech penny stocks, investors also consider a company’s product pipeline. One with a lot projects can show the ability of a company as well as a higher chance of success.
[Read More] 4 Meme Penny Stocks To Watch As DogeCoin Rises
Novan is currently working on four different projects, including SB204, SB206, SB208, and SB414. As a biotech company, NOVN focuses on the mechanisms, both natural antiviral and immunomodulatory, of nitric oxide. Its intended action with these products is to treat dermatological and oncovirus-mediated diseases.
Founded in 2006 by Mark Schoenfisch and Nathan Stasko, NOVN is based out of North Carolina. This year shares of NOVN have shot up by nearly 200%, and reached a high of over 520% in mid-February.
“We continued to make progress across our priority pipeline development programs over the first quarter. With the final Week-12 patient visit completed in our pivotal Phase 3 study for molluscum, B-SIMPLE4, we continue to work toward the targeted readout of our topline efficacy and safety data before the end of June.
Additionally, we continue to advance our preclinical program for COVID-19 and our animal health program, both targeting data readouts in the second quarter. With several near- and long-term milestones ahead, we believe we are well-positioned for an exciting year ahead.”
CEO of Novan, Paula Brown Stafford
4. Minerva Neurosciences Inc. (NASDAQ: NERV)
As many scientists know, one of the most important components of our body is our central nervous system. Companies like Minerva Neurosciences Inc. target this area of the brain as it is responsible for many neurodegenerative diseases. This includes Parkinson’s, Multiple Sclerosis, and Alzheimer’s to name a few.
NERV has developed a drug, Roluperidone, for the treatment of Parkinson’s disease. Roluperidone specifically targets the negative symptoms associated with schizophrenia and MIN-301. Recently, positive results have come from stage-3 trials of the drug after a 12-week double-blind study. This resulted in a price surge of over 35% in early morning trading.
“I am delighted to announce that our one-year Phase 3 trial, now completed, supports our view that Roluperidone, administered without concomitant treatment with antipsychotics, can potentially improve negative symptoms of schizophrenia and social functioning over the long term.
We believe the data also suggest that Roluperidone’s unique pharmacology and mechanism of action potentially help to maintain the stability of psychotic symptoms throughout treatment.”
Dr. Remy Luthringer, Executive Chairman of NERV
With this in mind, will NERV stock be on your watchlist?
Are Biotech Penny Stocks Worth It?
The biotech industry continues to make strides. The oscillating prices of a long list of penny stocks allow investors to buy in at low prices and sell at higher ones. However, this does not come without risks.
To succeed in the biotech industry, one must learn how the drug and medical device approval processes work. As investors, we do not have to fully understand the mechanisms of these products, but we do have to interpret what is good news and what is bad news.
Because of the rapid success of the COVID-19 vaccinations, the biopharmaceutical and biotech industries are looked on more favorably. Pandemic penny stocks and others related to these sectors, therefore, could have massive potential. What do you think of this list of biotech penny stocks? Which ones would you add?