In this article, we discuss the 10 best biotech penny stocks to buy now. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Biotech Penny Stocks to Buy Now.
The scintillating pace of technological advancement in the world over the past few decades has transformed the fortunes of the human race, freeing up important time for some of the top scientific minds in the world so that they can spearhead a biotechnology revolution that has discovered vaccines and cures for some of the most novel diseases ever known. Take the example of COVID-19, the worst pandemic in a hundred years. Biotech companies developed a vaccine for it within months of the outbreak, saving hundreds of millions of lives in the process.
According to a report by Grand View Research, the global biotechnology industry is expected to be worth close to $2.5 trillion within the next seven years, growing at a compound annual growth rate of close to 16% from 2021 through to 2028. However, research into the biotech sector by Bloomberg Intelligence shows that spending in the sector may normalize over the coming months if the vaccine deployment is successful, forecasting low-single and double-digitals revenue for the industry that has outperformed the S&P 500 since early 2020.
Some of the big names in the biotech sector include Novartis AG (NYSE: NVS), Teladoc Health, Inc. (NYSE: TDOC), and BioNTech SE (NASDAQ: BNTX), among others. Hedge funds have been piling onto these stocks over the past few months as they offer significant growth potential in the long term and have promising drugs in the pipeline. The biotech sector is one of the few market segments where large cap companies are in fierce competition with smaller firms for the development and marketing of new products.
Even as Novartis AG (NYSE: NVS), Teladoc Health, Inc. (NYSE: TDOC), and BioNTech SE (NASDAQ: BNTX) perform well, penny biotech stocks, mostly small firms working on only a few drugs at a time, still offer investors the chance to double their investments within a short space of time. However, this can be a high risk gamble, given that the success or failure of the firm would depend on a sole product getting regulatory, clinical, or production approval. As interest in penny stocks rises because of internet-based trading, biotech penny stocks are becoming even more popular.
Technological changes have even altered the dynamics of the financial world. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Photo by National Cancer Institute on Unsplash
With this context in mind, here is our list of the 10 best biotech penny stocks to buy now. These stocks were selected based on the growth potential each promises with regards to the drug pipelines as well as the performance of existing products in the market.
Best Biotech Penny Stocks To Buy Now
10. Catalyst Pharmaceuticals, Inc. (NASDAQ: CPRX)
Number of Hedge Fund Holders: 13
Catalyst Pharmaceuticals, Inc. (NASDAQ: CPRX) is a Florida-based biopharma company founded in 2002. It is placed tenth on our list of 10 best biotech penny stocks to buy now. The stock has returned more than 70% to investors year-to-date. The firm focuses on the development of therapies for the treatment of rare neurological diseases. Some of the famous products the firm already offers include Firdapse and Ruzurgi, treatments related to lambert-eaton myasthenic syndrome and pediatric lambert-eaton myasthenic syndrome.
On May 10, Catalyst Pharmaceuticals, Inc. (NASDAQ: CPRX) posted earnings results for the first quarter of 2021, reporting earnings per share of $0.11, missing market predictions by $0.02. The revenue for the first three months of 2021 was $30 million, up close to 4% year-on-year.
Back in March, Catalyst Pharmaceuticals, Inc. (NASDAQ: CPRX) had given the go-ahead to repurchase some 40 million shares using existing cash in hand. The stock of the firm surged 8.5% after the firm made the news of the repurchase public.
At the end of the first quarter of 2021, 13 hedge funds in the database of Insider Monkey held stakes worth $75 million in Catalyst Pharmaceuticals, Inc. (NASDAQ: CPRX), down from 16 the preceding quarter worth $66 million.
9. Cerecor Inc. (NASDAQ: CERC)
Number of Hedge Fund Holders: 10
Cerecor Inc. (NASDAQ: CERC) is a Maryland-based biopharmaceutical company founded in 2011. It is ranked ninth on our list of 10 best biotech penny stocks to buy now. The company’s shares have offered investors returns exceeding 32% over the course of the past twelve months. The company is working on therapies for many different kinds of diseases, including congenital disorders, adult onset stills disease, and systemic juvenile idiopathic arthritis, among others.
In quarterly earnings results posted on May 13, Cerecor Inc. (NASDAQ: CERC) reported earnings per share of -$0.32 for the first three months of 2021, missing market estimates by $0.13. The revenue over the period was close to $0.5 million, down a whopping 82% year-on-year.
On May 11, Cerecor Inc. (NASDAQ: CERC) had announced that the regulatory bodies in the United States had given the fast track status to CERC-002, a drug the firm had been working on for the treatment of patients hospitalized with COVID-19.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Armistice Capital is a leading shareholder in Cerecor Inc. (NASDAQ: CERC) with 32.6 million shares worth more than $98 million.
Just like Novartis AG (NYSE: NVS), Teladoc Health, Inc. (NYSE: TDOC), and BioNTech SE (NASDAQ: BNTX), Cerecor Inc. (NASDAQ: CERC) is one of the best biotech stocks to buy now.
8. Acasti Pharma Inc. (NASDAQ: ACST)
Number of Hedge Fund Holders: N/A
Acasti Pharma Inc. (NASDAQ: ACST) is a Canada-based biotechnology company founded in 2002. It is placed eighth on our list of 10 best biotech penny stocks to buy now. The stock has returned more than 73% to investors over the past year. The company primarily focuses on the development and marketing of drugs that treat cardiovascular diseases. Some of the drugs it has in the pipeline include CaPre and TRILOGY, the former a treatment for hypertriglyceridemia and the latter a drug to test the efficacy of CaPre.
In February, Acasti Pharma Inc. (NASDAQ: ACST) posted earnings results for the third quarter, reporting earnings per share of -$0.03, beating market predictions by $0.01. The cash flow over the period was $26 million, compared to almost $14 million in March 2020.
In September last year, Acasti Pharma Inc. (NASDAQ: ACST) had hired investment advisory Oppenheimer to explore different strategic alternatives to enhance shareholder value.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Two Sigma Advisors is a leading shareholder in Acasti Pharma Inc. (NASDAQ: ACST) with 51,200 shares worth more than $31,000.
Just like Novartis AG (NYSE: NVS), Teladoc Health, Inc. (NYSE: TDOC), and BioNTech SE (NASDAQ: BNTX), Acasti Pharma Inc. (NASDAQ: ACST) is one of the best biotech stocks to buy now.
7. VBI Vaccines Inc. (NASDAQ: VBIV)
Number of Hedge Fund Holders: 7
VBI Vaccines Inc. (NASDAQ: VBIV) is a Massachusetts-based biopharma company founded in 1965. It is ranked seventh on our list of 10 best biotech penny stocks to buy now. The company’s shares have returned more than 50% to investors over the course of the past twelve months. The firm is involved in the development of drugs for the treatment of infectious diseases. One of the famous products the company markets is Sci-B-Vac, a vaccine for hepatitis B.
On June 8, VBI Vaccines Inc. (NASDAQ: VBIV) stock surged more than 8% as the US government granted fast track status to a drug the firm is developing for the treatment of recurrent glioblastoma. The drug is branded VBI-1901.
On May 10, VBI Vaccines Inc. (NASDAQ: VBIV) posted earnings results for the first three months of 2021, reporting earnings per share of -$0.07, missing market predictions by $0.01. The revenue over the period was $0.3 million, down over 28% year-on-year.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Perceptive Advisors is a leading shareholder in VBI Vaccines Inc. (NASDAQ: VBIV) with 55 million shares worth more than $171 million.
Just like Novartis AG (NYSE: NVS), Teladoc Health, Inc. (NYSE: TDOC) and BioNTech SE (NASDAQ: BNTX), VBI Vaccines Inc. (NASDAQ: VBIV) is one of the best biotech stocks to buy now.
6. Protagenic Therapeutics, Inc. (NASDAQ: PTIX)
Number of Hedge Fund Holders: N/A
Protagenic Therapeutics, Inc. (NASDAQ: PTIX) is a New York-based biotechnology company founded in 1994. It is ranked sixth on our list of 10 best biotech penny stocks to buy now. The stock has offered investors returns exceeding 130% to investors over the course of the past twelve months. The company concentrates on the development of drugs that treat stress-related neuropsychiatric and mood disorders. One of the leading drug candidates for the firm is one that aims to dampen overactive stress responses.
On April 26, Protagenic Therapeutics, Inc. (NASDAQ: PTIX) announced that a public offering of more than 3 million units it was selling would be over $4 per unit. The firm aims to gather more than $13 million from the offering.
Back in September 2020, Protagenic Therapeutics, Inc. (NASDAQ: PTIX) had completed a convertible note financing and raised almost $2 million. The company said it aimed to use the proceeds to fund the development of a drug named PT00114, otherwise known as teneurin C-terminal associated peptide.
Just like Novartis AG (NYSE: NVS), Teladoc Health, Inc. (NYSE: TDOC) and BioNTech SE (NASDAQ: BNTX), Protagenic Therapeutics, Inc. (NASDAQ: PTIX) is one of the best biotech stocks to buy now.
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Disclose. None. 10 Best Biotech Penny Stocks to Buy Now is originally published on Insider Monkey.
