In this article, we discuss 10 biotech penny stocks with growth catalysts. If you want to see some more stocks in this selection, check out 5 Biotech Penny Stocks with Growth Catalysts.
According to Global Market Insights, the market for biotech in 2020 was valued at $497 billion, and it is forecasted to grow to $952.0 billion in 2027, at a CAGR of more than 9.4% between 2021 and 2027.
Increasing prevalent chronic diseases have led to high growth in biotechnology, especially in sub-sectors such as genomics, metabolomics, and proteomics. Similarly, RNA vaccines, CRISPR gene editing, and precision medicines are currently the focus of extensive clinical studies and research as well. In addition to that, the rising trend for organic food means that demand for biotech is also increasing in the agricultural space.
After an explosive surge in 2020, the biotech stocks collapsed 25% in 2021, and these companies were down by approximately 20% after January 2022.
Some of the most popular companies in the healthcare space include Moderna, Inc. (NASDAQ:MRNA), Pfizer Inc. (NYSE:PFE), and Amgen Inc. (NASDAQ:AMGN), but in this article, we focus on biotech penny stocks with growth catalysts.
Photo by National Cancer Institute on Unsplash
Our Methodology
After an extensive assessment of the biotechnology sector, we picked penny stocks that were priced under $5. These companies are working on some ambitious projects that could act as potential growth catalysts, propelling their stock prices significantly higher in the near-term.
Data from 900+ elite hedge funds tracked by Insider Monkey at the end of December 2021 was used to identify the number of hedge funds that hold stakes in each firm.
Biotech Penny Stocks with Growth Catalysts
10. Diffusion Pharmaceuticals Inc. (NASDAQ:DFFN)
Number of Hedge Fund Holders: 2
Share Price as of April 5: $0.2439
Headquartered in Charlottesville, Virginia, Diffusion Pharmaceuticals Inc. (NASDAQ:DFFN) is a biotechnology firm that focuses on drug development and therapies that improve the body’s ability to deliver oxygen. As of December 31, 2021, the company reported holding $37.3 million in cash and cash equivalents, which will fund operations through 2023.
Diffusion Pharmaceuticals Inc. (NASDAQ:DFFN) is in the midst of multiple clinical trials, which are expected to conclude in mid-2022 and in the second half of the year. One of the clinical studies involves evaluating tuberous sclerosis (TSC) as an adjunct to standard of care in the treatment of hypoxic solid tumors. Diffusion Pharmaceuticals Inc. (NASDAQ:DFFN) believes that it has the required data to initiate the Phase 2 trial of its oncology-focused Hypoxic Solid Tumor Program. The trial will commence in the second half of 2022, and upon completion, it will act as a major growth catalyst for the company.
According to Insider Monkey’s fourth quarter database, Renaissance Technologies and Two Sigma Advisors held bullish positions in Diffusion Pharmaceuticals Inc. (NASDAQ:DFFN), with combined stakes worth $441,000.
In addition to Moderna, Inc. (NASDAQ:MRNA), Pfizer Inc. (NYSE:PFE), and Amgen Inc. (NASDAQ:AMGN), Diffusion Pharmaceuticals Inc. (NASDAQ:DFFN) is a notable stock to invest in.
9. Alzamend Neuro, Inc. (NASDAQ:ALZN)
Number of Hedge Fund Holders: 3
Share Price as of April 5: $1.143
Alzamend Neuro, Inc. (NASDAQ:ALZN) is a clinical stage biotech company that develops pharmaceutical drugs and treatments for neurodegenerative diseases and psychiatric disorders, mainly focusing on Alzheimer’s. Priced at $1.14, Alzamend Neuro, Inc. (NASDAQ:ALZN) is a significant biotech penny stock to look out for.
On March 28, Alzamend Neuro, Inc. (NASDAQ:ALZN) announced the full results of its AL001 trial. AL001 is a lithium delivery system that works as an oral treatment for patients with dementia displaying cognitive impairment associated with Alzheimer’s. According to the company’s management, AL001 tested as safe and well-tolerated in healthy adult subjects, with no clinically significant abnormal findings in the trial. Bioequivalence may utilize AL001 when obtaining approval for the indications of presently available lithium products, and for new products as a benchmark for added safety.
According to Univest Securities analyst James Lang, a University of Cambridge study involving approximately 30,000 patients proved a significant link between lithium and dementia prevention. The analyst believes the new research validates Alzamend Neuro, Inc. (NASDAQ:ALZN)’s AL001 trials for Alzheimer’s disease. He reiterated a Buy rating on the stock with a $15 price target on March 21. AL001 should be approved by the FDA and commercialization will commence during 2025, added the analyst.
Among the hedge funds tracked by Insider Monkey, 3 funds reported owning stakes in Alzamend Neuro, Inc. (NASDAQ:ALZN) at the end of December 2021, worth $422,000, compared to 2 funds in the earlier quarter, holding stakes in Alzamend Neuro, Inc. (NASDAQ:ALZN) valued at $236,000. Paul Marshall and Ian Wace’s Marshall Wace LLP is the biggest stakeholder of the company, with 163,774 shares worth $313,000.
8. Cocrystal Pharma, Inc. (NASDAQ:COCP)
Number of Hedge Fund Holders: 3
Share Price as of April 5: $0.5299
Cocrystal Pharma, Inc. (NASDAQ:COCP) is a biotechnology company focused on the discovery and development of antiviral drugs and therapeutic treatments for chronic viral diseases. The company is headquartered in Bothell, Washington. Cocrystal Pharma, Inc. (NASDAQ:COCP) is a notable penny stock that could explode, priced at $0.52 as of April 5.
On March 10, Cocrystal Pharma, Inc. (NASDAQ:COCP) announced a Phase 1 clinical trial of its orally administered antiviral CC-42344 for the treatment of pandemic and seasonal influenza. According to the company management, there is an “urgent need for new antiviral medicines that address pandemic and drug-resistant seasonal influenza strains”. In pre-clinical testing, the drug has shown favorable safety profiles, which further validates Cocrystal Pharma, Inc. (NASDAQ:COCP)’s proprietary drug discovery platform technology. Once the antiviral hits the market, it will act as a significant growth catalyst for the company.
According to the fourth quarter database of Insider Monkey, 3 hedge funds held long positions in Cocrystal Pharma, Inc. (NASDAQ:COCP), with collective stakes amounting to $5 million. Hal Mintz’s Sabby Capital held the biggest position in the company, owning 5.7 million shares worth $3.73 million.
7. ObsEva SA (NASDAQ:OBSV)
Number of Hedge Fund Holders: 3
Share Price as of April 5: $1.605
ObsEva SA (NASDAQ:OBSV) is a clinical-stage biotech company that develops and discovers therapeutics for complications in reproductive health and pregnancy. ObsEva SA (NASDAQ:OBSV) was founded in 2012 and is headquartered in Geneva, Switzerland. On March 28, Aegis analyst Nathan Weinstein initiated coverage of ObsEva SA (NASDAQ:OBSV) with a Buy rating and a $12 price target.
ObsEva SA (NASDAQ:OBSV) announced its expected 2022 milestones on March 10. The company forecasts that it will achieve core clinical and regulatory objectives in 2022, such as FDA approval for Linzagolix, a specialized hormone antagonist, to treat uterine fibroids. Results for a study that determines whether Linzagolix is suitable for endometriosis were announced on March 22, building upon the positive topline conclusions announced in January 2022. The company is now working to develop Linzagolix to treat endometriosis, which could be commercially huge for ObsEva SA (NASDAQ:OBSV) upon conclusion.
Among the hedge funds tracked by Insider Monkey in Q4 2021, 3 funds were bullish on ObsEva SA (NASDAQ:OBSV), compared to 1 fund in the prior quarter. Ken Griffin’s Citadel Investment Group owns the largest position in the company, with 85,588 shares worth $170,000.
6. Pluristem Therapeutics Inc. (NASDAQ:PSTI)
Number of Hedge Fund Holders: 4
Share Price as of April 5: $2.11
Pluristem Therapeutics Inc. (NASDAQ:PSTI) is an Israel-based biotechnology company that works to develop and research cell therapeutic products for the treatment of ischemic, inflammatory, and hematologic conditions, in addition to autoimmune disorders.
On March 2, Pluristem Therapeutics Inc. (NASDAQ:PSTI) issued an update to its shareholders, and the CEO stated that he is confident about the direction that Pluristem Therapeutics Inc. (NASDAQ:PSTI) has taken. The cell expansion platform has the potential for high demand in the medical field and the company also announced its partnership with Tnuva, Israel’s largest food producer, to develop cultured food. Pluristem Therapeutics Inc. (NASDAQ:PSTI)’s cutting edge technology and expertise could make it a leader in this space, and it aims to launch raw meat products in 2023. An additional clinical hematological study is expected later in 2022 that will advance the creation of next generation products using CRISPR and induction technologies.
Pluristem Therapeutics Inc. (NASDAQ:PSTI) announced on March 23 positive final results from its innovative hematology Phase I study to evaluate the safety and exploratory efficacy of intramuscular injections of PLX-R18, which works to improve the regenerative potential of the bone marrow. The FDA’s recognition of PLX-R18’s potential to treat Acute Radiation Syndrome (ARS) is also notable. This treatment potentially carries great significance for current events in Ukraine and Europe, providing hope for treatment in the case of a nuclear war. Pluristem Therapeutics Inc. (NASDAQ:PSTI) believes that this treatment will promote well being, improve the standard of care, and likely save lives.
Among the hedge funds tracked by Insider Monkey at the end December 2021, 4 funds reported owning stakes in Pluristem Therapeutics Inc. (NASDAQ:PSTI), compared to 6 funds in the earlier quarter. Cathie Wood’s ARK Investment Management is the largest shareholder of the company, with more than 1 million shares worth $1.5 million.
Pluristem Therapeutics Inc. (NASDAQ:PSTI) is on the radar of elite hedge funds, just like Moderna, Inc. (NASDAQ:MRNA), Pfizer Inc. (NYSE:PFE), and Amgen Inc. (NASDAQ:AMGN).
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Disclosure: None. 10 Biotech Penny Stocks with Growth Catalysts is originally published on Insider Monkey.
