We recently compiled a list of the 10 Best Biotech Penny Stocks to Buy Now. In this article, we are going to take a look at where C4 Therapeutics, Inc. (NASDAQ:CCCC) stands against the other biotech penny stocks.
Biotech Stocks in 2024: Growth Prospects, Key Players, and Investment Opportunities
In 2024, the healthcare industry has been doing well, encouraging investors to look into new and exciting opportunities. Particularly biotech is anticipated to profit, despite the dangers of continuous mergers and acquisitions. Traders ought to exercise caution. With an 11.8% CAGR, the worldwide biotechnology market is expected to reach USD 4.25 trillion by 2033. It is expanding quickly. The U.S. market is projected to increase at an 11.90% CAGR to reach USD 763.82 billion by 2033 from its 2023 valuation of USD 246.18 billion. In 2023, the U.S. led North America in terms of revenue share.
Fitch Ratings maintains a Neutral outlook for the global biotech industry in 2024. Its primary motivation to do so is the moderating inflationary rates. The industry is supported by factors such as a growing aging population, increased healthcare access, and a rise in chronic and specialist conditions. Fitch also forecasts a heightened focus on drug pricing and patient value.
Biotech equities including Vincerx Pharma (VINC), Corbus Pharmaceuticals (CRBP), and Viking Therapeutics (VKTX) have seen significant gains in 2024, with returns ranging from 134% to 446%, despite receiving less media attention than industries like technology and cryptocurrencies. Positive weight loss drug trial findings, for example, let Viking Therapeutics connect its product with a potentially billion-dollar market need. Although the success of individual stocks indicates prospective gains, larger indexes such as the NASDAQ Biotechnology PR USD Index reveal the volatility of the industry; it fell 11% between 2022 and 2023 as a result of economic difficulties but gained 3% by February 2024.
Investors eyeing biotech stocks may wonder which areas are prone to buyouts. Laura Chico identified key areas to watch for potential buyouts:
“Obesity has been a really big theme in 2023, and will probably continue for the foreseeable future, but across the area, at least in these recent M&A transactions, it’s been really broad-based, and I think that’s really a testament to the innovation in the space. We have several deals in oncology, immunology, inflammation, neuro, and even rare diseases. So it’s not just within certain verticals at this point.”
Chico advises biotech investors to monitor FDA approval news, scientific and clinical risks, and the disease categories that companies are targeting since these might provide indicators of company success. On March 6, Healthcare Equity Strategist Jared Holz talked about this possibility on CNBC’s “The Exchange”:
“[Biotech] has been one of the worst spaces in all of the equity market since mid-2021. We’ve barely seen any positive activity for any pronounced period until very recently… When you consider the risk factors, concerning drug prices and other elements of the business… all these risk factors are much more well understood and we can continue to move higher from here.”
Holz emphasizes the potential in well-positioned small-cap choices and says it’s not too late to invest in large-cap biotech equities. We’ve put up a list of oversold biotech stocks, which includes excellent choices under $20 as well as cheap options that have been missed.
Our Methodology
To rank the best biotech penny stocks to buy now, we first identified large biotech companies priced under $5. We then selected the top 10 and ranked them based on the number of hedge fund holders in Q1 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A patient receiving medical treatment for cancer with an experimental biopharmaceutical product.
C4 Therapeutics, Inc. (NASDAQ:CCCC)
Number of Hedge Fund Holders: 25
C4 Therapeutics, Inc. (NASDAQ:CCCC) is emerging as one of the most promising biotech penny stocks to consider for investment. The company specializes in developing targeted protein degradation science to create a new generation of small-molecule medicines for treating various diseases. C4 Therapeutics has achieved several milestones recently, for example, they partnered with Merck in December 2023 to develop degrader-antibody conjugates, receiving an upfront payment of $10 million and potential milestone payments totaling up to $600 million, along with royalties on future sales. Ron Cooper was appointed as Chairman of the Board of Directors, bringing valuable strategic guidance. Additionally, their drug candidate CFT7455 has shown promising early results in treating multiple myeloma, demonstrating high activity even at low doses.
C4 Therapeutics holds a bullish outlook driven by its innovative TORPEDO platform for degrader payloads, attracting major pharmaceutical partnerships. The recent collaboration with Merck has bolstered its financial position, funding clinical advancements. The partnership also offers significant revenue potential, with potential milestone payments of up to $740 million from Merck KGaA. In Q1 2024, 25 hedge fund holders held positions in the company, up from 21 in the previous quarter. RA Capital Management held the largest position in the company with 4,878,000 shares worth $39,853,260, comprising 0.5% of the company’s total portfolio.
In Q1 2024, C4 Therapeutics, Inc. (NASDAQ:CCCC) reported a total revenue of $3.0 million which is slightly down from $3.8 million in the same period last year. The company’s cash position as of March 31, 2024, stood strong at $299.2 million, expected to fund operations into 2027. C4 Therapeutics reported a net loss of $28.4 million for Q1 2024, showing improved financial management and reduced expenses compared to the previous year. Additionally, the company received an $8 million payment from Biogen for delivering its first development candidate.
Overall CCCC ranks 3rd on our list of the best biotech penny stocks to buy. You can visit 10 Best Biotech Penny Stocks to Buy Now to see the other biotech penny stocks that are on hedge funds’ radar. While we acknowledge the potential of CCCC as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CCCC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.