5 Biotech Penny Stocks with Growth Catalysts

2. Verastem, Inc. (NASDAQ:VSTM)

Number of Hedge Fund Holders: 16

Share Price as of April 5: $1.51

Verastem, Inc. (NASDAQ:VSTM) is a biotechnology company that develops medication and treatments for oncology patients. The company was incorporated in 2010 and is headquartered in Needham, Massachusetts. Priced at $1.51, Verastem, Inc. (NASDAQ:VSTM) is a significant biotech penny stock that exhibits growth catalysts. 

On March 28, Verastem, Inc. (NASDAQ:VSTM) announced that it has received a funding of up to $150 million from Oxford Finance via a credit facility for the commercial preparation and potential launches of VS-6766 and defactinib, which are treatments for ovarian cancer and lung cancer.

Truist analyst Srikripa Devarakonda initiated coverage of Verastem, Inc. (NASDAQ:VSTM) on March 9 with a Buy rating and a $6 price target. According to the analyst, the stock is “undervalued” given its directed programs in two cancers. Devarakonda added that Verastem, Inc. (NASDAQ:VSTM) can benefit from a $470 million market opportunity in ovarian cancer, as well as the “early but strong” clinical data and positive expert feedback.

The Q4 database of Insider Monkey suggests that 16 hedge funds were bullish on Verastem, Inc. (NASDAQ:VSTM), with collective stakes worth approximately $106 million. Julian Baker and Felix Baker’s Baker Bros. Advisors is the largest shareholder of the company, with roughly 21.5 million shares valued at $44 million.