In this article, we will discuss the 5 best biotech stocks under $5 in 2021. If you want to read our comprehensive analysis of the biotech sector, go directly to the 10 Best Biotech Stocks Under $5.
5. NuCana plc (NASDAQ:NCNA)
Number of Hedge Fund Holders: 7
Price as of October 14, 2021: $2.74
NuCana plc (NASDAQ:NCNA) is a UK-based biotech company focused on discovering treatments for different types of cancer. The company has its proprietary ProTide technology that has played an integral part in the development of notable antiviral drugs like sofosbuvir by Gilead Sciences, Inc. (NASDAQ:GILD).
In addition to this, the FDA gave fast track designation to NuCana’s Acelarin (NUC-1031) as the first line of treatment for patients with advanced biliary tract cancer. Although the drug is in Phase 3 study, the Fast Track status is granted to drugs that are viable and cater to serious medical needs. As a result of this grant, NuCana plc’s (NASDAQ:NCNA) stock saw a surge of 21% in premarket trading.
The consensus price target for NuCana plc (NASDAQ:NCNA) among the four analysts providing 12-month predictions is $20.14.
4. Arbutus Biopharma Corporation (NASDAQ:ABUS)
Number of Hedge Fund Holders: 5
Price as of October 14, 2021: $4.15
Arbutus Biopharma Corporation (NASDAQ:ABUS) is a Canadian biotech company that is focused on developing a treatment for hepatitis B infection. Around its main drug, AB-729, Arbutus Biopharma Corporation (NASDAQ:ABUS) is working on mid-stage trials with three different partners and expects results from these trials in the second half of 2021 and early 2022.
Arbutus Biopharma Corporation (NASDAQ:ABUS) was also in the limelight after it won a patent infringement case against Moderna, Inc. (NASDAQ:MRNA) for the use of its lipid nanoparticles that help in the delivery of drugs to certain cells. This delivery system has been employed in the development of the COVID-19 vaccine by Moderna. The win can open the door to potential royalties from the vaccine that is expected to generate annual revenues of $20 billion for Moderna.
The company was covered by B. Riley Securities with a Buy rating and a price target of $7.
3. Leap Therapeutics, Inc. (NASDAQ:LPTX)
Number of Hedge Fund Holders: 9
Price as of October 14, 2021: $3.32
Leap Therapeutics, Inc. (NASDAQ:LPTX) is a single-asset biotech firm founded in 2011. The single asset therapeutic DKN-01 is an antibody that targets the WNT antagonist DKK1, which is commonly found in cancer. DKK1 is crucial to the growth of carcinogenic cells.
Leap Theurapetics, Inc. (NASDAQ:LPTX) has seen a rise of over 85% on the back of positive results of Phase 2a study for DKN-01 in combination with other therapies and chemotherapy in gastric cancer. This provides potential upside in the future as the research gains momentum further through favorable results.
Mara Goldstein, an analyst at Mizuho Financial Group, seems to be bullish on DKN-01 as she initiated coverage on Leap Therapeutics Inc. (NASDAQ:LPTX) with a Buy rating and a target price of $6.
However, this should be pointed out that Leap has licensed DKN-01 from Eli Lilly and Company (NYSE:LLY), and in case of approval from the FDA, the company would have to pay royalties on potential net sales. Furthermore, the company would have to pay potential royalties to Lonza for licensing its technology.
2. Voyager Therapeutics, Inc. (NASDAQ:VYGR)
Number of Hedge Fund Holders: 13
Price as of October 14, 2021: $4.40
Voyager Therapeutics, Inc. (NASDAQ:VYGR) is a Massachusetts-based biotechnology organization that is home to the proprietary RNA-based functional screening technology, TRACER. The technology helps in identifying distinct capsids that can target certain cells and tissues more effectively as opposed to the current methods. The company also has proprietary adeno-associated virus (AAV) capsids through TRACER technology.
Voyager Therapeutics, Inc. (NASDAQ:VYGR) has been in the limelight following an agreement with Pfizer Inc. (NYSE:PFE) that would allow the pharmaceutical giant to license drugs formulated as a result of Voyager’s RNA-driven TRACER screening technology. In exchange, Voyager Therapeutics, Inc. (NASDAQ:VYGR) would receive a $30 million payment upfront and milestone payments of $600 million along with sizeable royalties on net product sales.
Yanan Zhu, an analyst at Wells Fargo, commented that the licensing agreement between the two companies validates the TRACER screening technology and potentially opens the door to more such deals with other partners down the line. Investment firm Baird upgraded the stock from a Neutral to an Outperform rating and raised the target price from $6 to $9 based on this development.
At the end of the second quarter of 2021, 13 hedge funds in Insider Monkey’s database held stakes in Voyager Therapeutics, Inc. (NASDAQ:VYGR), worth $27.9 million, up from 9, worth $24.1 million in the preceding quarter.
1. Seelos Therapeutics, Inc. (NASDAQ:SEEL)
Number of Hedge Fund Holders: 13
Price as of October 14, 2021: $2.35
Seelos Therapeutics, Inc. (NASDAQ:SEEL) is involved in the development of treatment for patients with central nervous system (CNS) disorders. The company is betting on realizing the potential of SLS-002, intranasal racemic ketamine for the treatment of major depression disorders (MDD) and acute suicidal ideation and behavior (ASIB). Presently, the research is in the proof-of-concept stage, and if approved, it would only be the second medication of its kind, following the approval of Johnson & Johnson’s (NYSE:JNJ) fast-acting Spravato in June 2020. Seelos Therapeutics, Inc. (NASDAQ:SEEL) also has a couple of gene therapy medications to combat Parkinson’s disease.
On the back of a positive outlook from the research, Johnathan Aschoff, equity analyst at Roth Capital, upgraded Seelos Therapeutics, Inc. (NASDAQ:SEEL) from a Neutral to a Buy rating with a target price of $8, which reflects an upside potential of over 240% from the current stock price. Investment advisory firms B. Riley and Guggenheim also covered the stock and gave a Buy rating with a target price of $11 and $8, respectively.
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