This article was last updated on July 6, 2022
Biotechnology is an exciting new field in the world of science. Through its implementation, scientists have been able to make great strides in the development of the modern world. Some of the most revolutionary and influential discoveries in medicine, industry, and other sectors have been thanks to biotechnology. However, like all branches of science, biotech requires extensive research and development. This means that a lot of financial support is needed in order to support the various organizations. As a result, many biotechnology companies will become publicly listed in order to raise funds. Today we are looking at some of the most promising biotech penny stocks you can invest in.
Table of contents
- What Are Biotech Penny Stocks?
- Why Are Biotech Penny Stocks Important For Investors
- Top Biotech Penny Stocks
- Seelos Therapeutics (NASDAQ: SEEL)
- electroCore (NASDAQ: ECOR)
- Hoth Therapeutics Inc. (NASDAQ: HOTH)
- Halberd (OTCMKTS: HALB)
- Acasti Pharma (NASDAQ: ACST)
- ReWalk Robotics Ltd. (NASDAQ:RWLK)
- Asensus Surgical, Inc. (NYSE:ASXC)
- Diffusion Pharmaceuticals Inc. (NASDAQ:DFFN)
- Pluristem Therapeutics Inc. (NASDAQ: PSTI)
- Akebia Therapeutics Inc. (NASDAQ: AKBA)
- Best Platforms To Buy Biotech Penny Stocks On
- Closing Thoughts On Biotech Penny Stocks
What Are Biotech Penny Stocks?
Biotechnology is the combination of natural science and engineering. By applying man-made principles of engineering to biological cells, organisms, molecules, and more, scientists are able to modify and improve on them. This allows them to apply them in products and services with a wide variety of uses.
While biotechnology might be a relatively new field in science, humans have actually been utilizing its principles for millennia. Agriculture, breeding livestock, and brewing are all ancient examples of biotechnology. These processes take naturally-occurring elements and apply engineering principles and methods to make them better for human use.
Throughout the years, biotechnology has become much more advanced and is now the leading science in the development of medicine, agriculture, food, and numerous other industries.
One notable example of biotechnology in medicine is the development of synthetically-created insulin for use with humans in 1978. Prior to this, the main source of insulin was animals from which it was extracted. Through the use of biotechnology, scientists were able to create genetically-engineered bacteria which synthesize the substance at great speed and quantity. This has greatly reduced the cost and time needed to produce insulin.
Why Are Biotech Penny Stocks Important For Investors
Because biotech is a field where innovation takes place on a daily basis, it means that there is great potential for explosive growth in the industry. Small companies and research organizations can become overnight successes, quickly skyrocketing in value. With new discoveries and patents, they can become market dominators with a large potential for development and growth.
This is particularly relevant in the field of medicine, where patent holders often license the use of their formulae and technology to other companies. As sole owners of the patents, other organizations need to pay these companies for the use of their proprietary products. This creates a stable and passive source of cash flow for years to come.
While high-risk assets, penny biotech stocks are a great way for investors to diversify their portfolios and get in on the field of science. Because they are priced below $5 per share, these stocks are also relatively affordable and can easily be purchased in bulk.
The biotech industry has recently seen a surge in both interest and value due to the COVID-19 pandemic. As the world races to find a solution to the outbreak, many have turned to biotech for a possible cure. This, in turn, has increased investor interest.
Top Biotech Penny Stocks
While investing in the biotech industry might sound like an attractive prospect, you might find it difficult to actually do so effectively. Because the market is so crowded with different companies, it can be difficult to suss out the ones with potential. As a result, we have put together a list of some of the most promising biotech penny stocks under $5:
Seelos Therapeutics (NASDAQ: SEEL)
Seelos Therapeutics is a biotechnology company in the field of medicine. It is currently in the process of developing 5 core therapeutic products. Each of these treats a different rare disorder with many unmet needs. Some of these include neurological disorders such as ALS, Parkinson’s disease, depressive disorders, and posttraumatic stress disorder.
The company is headed by a board of seasoned investors and scientists, each one with over 20 years of experience in the medical industry. At present, the company’s products are undergoing medical trials and expecting approval for market release. Currently, Seelos is trading at $0.81 per share.
electroCore (NASDAQ: ECOR)
electroCore is another biotech company in the medical field. However, this one focuses on the development and production of a non-invasive electronic device that can relieve headache pains. The gammaCore is a handheld device that patients can use to massage two nerves on the back of their neck. This relieves headache pains from migraines, cluster headaches, Hemicrania Continua, and Paroxysmal Hemicrania.
Because the device is non-invasive, handheld, and portable, it can be used at any time or place. Meanwhile, because such a large percentage of the population suffers from regular headaches and migraines, the potential market is incredibly large. At its current price of $0.59, ECOR is a steal.
The gammaCore range of products is also the only FDA-approved product currently in this market. This means that it has severely limited competition and can dominate its market if successful. This makes it a great biotech penny stock to invest in on the cheap.
Hoth Therapeutics Inc. (NASDAQ: HOTH)
Hoth Therapeutics is a biopharmaceutical company that is developing a range of 9 different products and solutions. These span several categories and include topical creams, vitamins, Lupus treatments, and more. However, Hoth’s main strength is the company’s focus on the treatment of COVID-19.
At present, Hoth is developing several therapeutics that aim to treat the illness. Additionally, the company has successfully deployed its VaxCelerate platform in the Vaccine and Immunotherapy Center (VIC) at Massachusetts General Hospital (MGH). This allows for a self-assembling vaccine (SAV) which is effective against a number of illnesses. At present, scientists are using the same technology to develop a similar vaccine for SARS-CoV-2.
Thanks to its remarkable lineup of products, Hoth has seen some significant growth over the past years. While not constant, share prices have doubled on several occasions. Currently, prices sit at $0.43 per share.
Halberd (OTCMKTS: HALB)
Another company that has recently pivoted toward a focus on COVID-19 detection and treatment is Halberd. With its patented extracorporeal treatment, Halberd promises to tackle various blood-borne and cerebrospinal fluid-related diseases. This includes cancer, blood sepsis, multiple sclerosis, fibromyalgia, and more.
While the treatment is advertised as highly effective for the rapid detection of COVID-19, one of its strongest points is actually its effectiveness with posttraumatic stress disorder (PTSD).
Although the relevance to the current pandemic can serve to boost the company’s value in the short term, it is its effectiveness with other illnesses and diseases that make it viable in the long run. PTSD, in particular, is a very widespread issue, with 3.5% of US adults experiencing the disorder each year.
Acasti Pharma (NASDAQ: ACST)
Acasti Pharma is a biopharmaceutical company developing various products, with three currently in its pipeline. Their main product, however, is their cardiovascular drug, CaPre. This can be used to treat hypertriglyceridemia- a chronic condition that affects over one-third of the adult population in the United States.
Most recently, the drug took part in phase 3 clinical trials. While it did provide satisfactory results, it was unable to pass due to unusually high effects from the placebo used in the study. As a result, the drug will go through a new trial in the near future.
The drug and the company as a whole have strong potential as hypertriglyceridemia is a highly prevalent condition affecting a large percentage of the global population. Any treatment or remedy for it would be highly profitable as the market is starved for such a product.
ReWalk Robotics Ltd. (NASDAQ:RWLK)
ReWalk is a developer and producer of a range of exo-suits intended for use by patients with impaired mobility. While the concept of an exoskeleton might sound far off and futuristic, the technology is actually available today.
Their latest model is the ReStore suit which is a powered, lightweight, wearable soft exo-suit. Physitians can use this to treat stroke and other patients suffering from lower-body disabilities. Physitians can use the suit during rehabilitation and recovery periods.
Both flagship ReWalk devices are FDA-approved and available on the market. In the third quarter of 2021, the company reported earnings of $2 million and a gross margin of 58%. Additionally, the company received breakthrough device designation for ReBoot solution from the FDA. As a result, stock prices received a significant boost at the time, doubling to reach a high of $2.59 per share. At current, ReWalk is a highly accessible biotech penny stock with a futuristic feel and promising outlook. Currently, prices have stabilized at around the $1 mark.
Asensus Surgical, Inc. (NYSE:ASXC)
Asensus Surgical is a robotics developer currently marketing a laparoscopic surgery solution. By implementing advanced robotics technology, the company is able to provide surgeons with a digital interface that assists in minimally-invasive surgeries.
This robotic solution allows for greater precision and eliminates inefficiencies during the surgical process. Furthermore, it can assist in lengthening a surgeon’s career, as many a forced to retire at a young age due to performance issues. This is particularly important as the Association of American Medical Colleges has forecasted a deficit of over 33,000 surgeons and specialists by 2030.
As such, Asensus aims to tackle not only current issues in the medical field but future ones as well. This strengthens its position on the market and provides it with a long-term business plan. While stock prices have been on a downward trend for the past 6 months, the company has some promising tech and has entered into several partnerships that greatly increase its chances of success in the coming years.
Diffusion Pharmaceuticals Inc. (NASDAQ:DFFN)
Another pharmaceutical biotech company, Diffusion focuses on providing oxygen delivery systems and solutions for patients suffering from various conditions. Their core product is the Trans sodium crocetinate (TSC) which acts as a small molecule therapeutic. By utilizing a novel mechanism of action, this solution helps the diffusion of oxygen to hypoxic tissues.
Diffusion’s focus on oxygen delivery has paid off during the COVID-19 pandemic, as the disease mainly attacks the patient’s respiratory system. This had a very positive effect on the company’s stock prices which surged in August of 2021. The company also announced that it has secured funding through 2023, which means that it will continue to operate for the near future. This gives the company time and security to further develop its solutions.
Pluristem Therapeutics Inc. (NASDAQ: PSTI)
Pluristem is an Israeli pharmaceutical company specializing in the development of stem cell research and treatment. The company’s solutions can be used to treat a number of conditions affecting various organs and sections of the body. Furthermore, Pluristem’s products are also highly effective in the recovery from surgeries and other traumatic events in the human organism.
As is the case with many other biotech firms, Pluristem has also focused on the treatment of COVID-19 over the last year. The company’s solutions are also effective in the treatment of the long-term effects of acute respiratory distress syndrome as a result of COVID-19.
All of Pluristem’s solutions are currently at various stages of medical trials ranging from phase one to phase three in the US, EU, and Israel. This gives them an extensive pipeline of three products. The company also announced a partnership with Israel’s largest food producer to develop a cultured food platform. This promises to further diversify the applications of the company’s technology and strengthen its position on the market. At present, you can invest in PSTI at $1.35 per share.
Akebia Therapeutics Inc. (NASDAQ: AKBA)
Akebia Therapeutics focuses on the development of treatments for various conditions stemming from kidney failure. Since its founding in 2007, the company has been well-positioned within this sector and has become highly specialized.
Their core product, Vadadustat, is an oral solution that treats anemia and other deficiencies stemming from kidney disease. At present, the drug is going through phase 3 medical trials and awaiting approval from the FDA in the United States.
With a price tag of slightly under $0.50, Akebia is a very affordable penny stock and a way to get into the biotech industry.
Best Platforms To Buy Biotech Penny Stocks On
When investing, picking the right company to put your money into is only half the battle. Once you have done this, you will need to make an equally important decision- choosing the right online broker. This can depend on your trading style and experience level and can have a huge effect on your bottom line. Here are a couple of our most recommended online trading platforms for you to consider:
Interactive Brokers is an older and highly-respected online broker. The company has been around since the ’80s and has been a market leader for over 30 years. In contrast to eToro, IB is a much more complex platform, targeting industry professionals and day traders rather than retail investors. As such, it can be overwhelming for some, especially in the beginning.
However, there is a reason why it has remained at the top for so long. Interactive Brokers offers an extensive platform with comprehensive market data and tools. However, this premium service does come at a higher price. Access to each tool is paid separately, and real-time market data is provided via a monthly subscription model for each exchange.
TD Ameritrade is is another well-established online brokers, preferred by professionals and retail investors alike. This platform, however, is mostly limited to the US and a handful of other countries. As such, fewer users will be able to take advantage of its numerous features and advantages.
For those who can access the platform will be able to trade on major stock exchanges, the foreign exchange market, crypto markets, and more. The platform also offers access to the OTCBB which is great for those looking to invest in cannabis penny stocks, as most of these are listed on that market.
While TD Ameritrade’s platform is highly professional and rich in tools and features, it is not difficult to use. This is thanks to the company’s commitment to education and wide accessibility. By combining an extensive educational section with a simple design for various tools, TD Ameritrade has become the platform of choice for both seasoned and beginner investors.
Closing Thoughts On Biotech Penny Stocks
As it stands, investing in biotech is a high-risk, high-reward venture. However, this is the case with all penny stocks, as most of the companies in this category are either still in the early stages of their development or have yet to gain mainstream popularity.
In most instances, Biotech companies are involved in the medical and pharmaceutical industries. As such, they need to pass rigorous trials and screening processes in order to acquire approval for distribution. This makes them a risky early investment as these can take years to complete. Unforeseen setbacks and complications often arise as well, further extending the required time and postponing the potential ROI.
As with all penny stocks, it is advisable that you diversify your portfolio and invest only as much as you are comfortable losing. This way, you can offset your risk and leave the investments on the back burner.
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