Top Biotech Penny Stocks To Watch
If you are looking to invest in penny stocks, there has never been a better time than now. By definition, the term “penny stock” refers to stocks that trade under $5. Thanks to this, the low cost provides an interesting entry opportunity for investors to capitalize upon. Also, the pandemic has helped shine a light on a variety of biotech penny stocks, specifically.
When it first began in March, investors were laser-focused on biotech companies producing either Covid vaccines or treatments. Now, the market seems to have fundamentally changed, shifting the focus toward a larger range of biotech stocks. Because of this, interest in all types of companies continues to grow.
What types of biotech companies should you look out for? Well, the best way to start is to take a deep dive into a company with solid prospects. Investors should look at what stage a company’s trials are in, and if any compounds are in the commercialization stage. Also, is it producing any treatments related to Covid, such as vaccines or preventative medicines? Does the company have strong financial backing, or does this just seem to be a speculative gain?
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Biotech Penny Stocks To Buy?
Taking all of this into consideration, it’s important to research before deciding to buy penny stocks. While the risk can be high, the reward can be equally as enticing. Here’s a short list of penny stocks to watch as biotech heats up. I’ll leave it up to you to decide if they’re top biotech stocks to buy or if you should avoid them entirely.
- Zomedica Corp. (NYSE: ZOM)
- Auris Medical Holding Ltd. (NASDAQ: EARS)
- Oncolytics Biotech Inc. (NASDAQ: ONCY)
- Genprex Inc. (NASDAQ: GNPX)
Penny Stocks to Buy [or avoid]: Zomedica Corp.
While Zomedica Corp. hasn’t had the best month, it seems like things may be about to change. It develops and commercializes products for companion pets. There are currently a few things that are affecting shares of ZOM stock. The first of which is Zomedica’s year-end 2020 financial results.
The company recorded a net loss and no revenue. Despite this, it did see improvement in parts of its balance sheet. The CEO of Zomedica, Robert Cohen, stated, “While we are thankful for our substantially improved balance sheet, we continue to be good stewards of our funds by remaining efficient in our operations as we prepare for the upcoming commercial release of TRUFORMA®.”
On March 16th, Zomedica announced its first commercial sale of Truforma. Cohen added, “This is a momentous day for Zomedica, our shareholders, the veterinarians we serve, and the companion animals in their care.”
With the commercial launch of TRUFORMA and new capital being raised, now is the time for Zomedica to scale things out. Selling a few initial units is great, but with the door open to full industry sales, traders are looking for growth. Heading into the second quarter, this will be something to keep a close eye on. Needless to say, ZOM stock has experienced a big year so far. Shares have climbed from around $0.25 in January to over $1.40 this week.
Auris Medical Holding Ltd.
Another penny stock that climbed substantially on Thursday is Auris Medical Holdings Ltd. The clinical-stage biotech company creates therapeutics for neurology, rhinology, allergy, and CNS disorders. Auris provided a business update around a week ago and reported its second half and full-year 2020 financial results. Its business update included the announcement of progression with its clinical evaluation of AM-301 taken intra-nasally. The treatment has already been shown to reduce SARS-CoV-2 virus titers in animals. The company expects to launch this quarter.
The Chairman and CEO of Auris, Thomas Meyer, said, “With a highly dedicated team, we managed to develop in less than six months a drug-free nasal spray that reduced the SARS-CoV-2 viral titer in a model representative of the human nasal mucosa by more than 99%.”
This product could be huge if it continues to be this effective and makes it to market. Auris plans to announce a business update on its AM-301 program next Tuesday on April 13th. While this announcement’s details are not clear right now, only time will tell what is on the horizon for EARS stock. Ahead of this update, shares climbed over 18% on April 8th.
Oncolytics Biotech Inc.
Now let’s talk about Oncolytics Biotech, a development stage company focused on discovering and developing pharmaceutical products to treat cancer. The world is always looking for new cancer treatments and hopefully someday a cure. This makes the role of these biotech companies huge, attracting investors along the way. This week Oncolytics announced that it would participate in a panel discussion at the Canaccord Genuity Horizons in Oncology Virtual Conference on April 15th, 2021.
This announcement seems to have piqued investor interest. ONCY stock is up over 5% following the announcement. Just 3 days earlier, Oncolytics announced that it will host a key opinion leader webinar to discuss its AWARE-1 data, the immunotherapeutic effects of Pelareorep in breast cancer, and its synergistic activity with CAR T cells in solid tumors. This webinar will take place on April 12th, 2021. So next week could be a defining week for Oncolytics if a lot of good progress is announced.
The last biotech penny stock on this list, Genprex, is a clinical-stage gene therapy-focused company working on treating cancer patients and those with diabetes. As mentioned before, companies focused on cancer treatment often have solid market performance. Diabetes is also a disease that affects millions, making the market for treatments huge.
On March 30th, Genprex announced that preclinical data for TUSC2 immunogen therapy in non-small cell lung cancer would be presented soon. This data will be featured in two presentations at the 2021 American Association for Cancer Research Annual Meeting. This meeting takes place on April 10th.
President and CEO Rodney Varner stated, “We look forward to the presentation of these data that highlight the potential of TUSC2 immunogene therapy to enhance chemo-immune combination treatments and overcome resistance to osimertinib in lung cancer, to an audience of the world’s leading cancer researchers.”
The hype is there for this news release, but could this be a case where investors buy the rumor and sell the news? Only time will tell, and it likely could depend on what is in these results.
Biotech Penny Stocks & Volatility
It’s important to understand how volatile biotech stocks can be, in general. I’m not only talking about small-caps but the sector as a whole. The fact that these companies are dealing with life-changing treatments means there’s little room for error. In this case, things like trial data are essential.
When companies report a miss of an endpoint or a notice from the FDA not to proceed with phase trials, it can raise red flags until the company gives clarity. On the other hand, when companies announce breakthrough developments like big progress in phase trials, it can be a green light for traders and investors to rally behind a company. In either case, it can make for a very wild situation in the stock market.