Penny stocks have remained some of the most popular assets over the past year or so. While this began as a way to capitalize on penny stocks benefitting from the pandemic, investors are now finding biotech stocks simply because of the work they are doing.
And while trading penny stocks in the biotech industry is just like trading any other security, there are some nuances to consider. So to help create the best biotech-focused penny stock watchlist, let’s take a look at a few factors to consider.
The first and most obvious is; what is going on in its pipeline? With biotech, it’s important to have a good mix of FDA-approved compounds or medical tech products, as well as those that are still in the various stages of approval. With a lot of biotechnology companies, we see one or the other, however, having a healthy mix of the two can serve to diversify your holdings.
In line with this is; what category does the company work in? While some work in treating certain ailments like cancer or diabetes, others are producing more broad-based medical tech products. And as always, some companies are working in between these two. But, this is an important distinction to make as it can help to keep your portfolio in line with your investing goals.[Read More] Penny Stocks to Buy? Here’s 3 For Your Thursday Morning Watchlist
The second aspect to consider is what do its finances look like? Because biotech companies only turn a profit if a compound is commercialized or licensed out, often balance sheets will show high debt and little in the way of earnings. Due to this, many companies will engage in massive fundraising opportunities like bought-deal offerings and common share stock sales.
These are ways to offer capital while revenue may still be small. With this, investors should consider share dilution as well as how long its cash balance will sustain it. Considering all of this, let’s take a look at three penny stocks making big waves in the biotech industry right now.3 Biotech Penny Stocks to Watch
- Vistagen Therapeutics Inc. (NASDAQ: VTGN)
- Atossa Therapeutics Inc. (NASDAQ: ATOS)
- Citius Pharmaceuticals Inc. (NASDAQ: CTXR)
Vistagen is a biopharmaceutical company you might be familiar with if you read our content regularly. For those who haven’t heard about it, VTGN is developing medicines to treat a variety of conditions including anxiety, depression, and other mental illnesses. This includes its innovative PH94B nasal spray, which will soon enter a Phase 3 trial for its potential to treat anxiety in adults.
In the Phase 2 study, PH94B showed high efficacy as an anti-anxiety drug where the effects can be felt in as little as 15 minutes. Additionally, it did not report any notable adverse side effects or safety concerns in any early trials.
The company believes that because of the Covid-19 pandemic, more Americans are struggling with mental health issues than ever before. Currently, doctors prescribe medicines such as benzodiazepines or beta-blockers as the first line of treatment. However, these drugs can take months before the effects are fully realized. For this reason, there is a constant and growing demand for rapid onset compounds that can treat common mental health disorders.[Read More] 4 Reddit Penny Stocks To Buy On Robinhood For Under $1 Right Now
Only a few weeks ago, Vistagen reported that its PH10 nasal spray could have the same anti-anxiety and anti-depression effects as benzodiazepines, without the sedative side effects. Mark Smith PhD., Chief Medical Officer at Vistagen, stated that “these preclinical data suggest that PH10’s mechanism of action does not work through GABA-A receptors, unlike many other neurosteroids, suggesting it may not have benzodiazepine-like side effects, such as sedation and cognitive impairment, or abuse liability.”
This is a large breakthrough, especially considering the abuse of drugs that currently exist to treat anxiety and depression. With all of this in mind, is VTGN stock worth watching?Atossa Therapeutics Inc. (NASDAQ: ATOS)
Up in the double-digit percentage points by midday is Atossa Therapeutics Inc. Again, we’ve been covering ATOS for quite some time due to its large and potentially promising pipeline. Similar to Vistagen, Atossa works as a clinical-stage biopharmaceutical company. Its focus is on treating unmet needs in the oncology and infectious diseases categories.
Only a few weeks ago, Atossa announced that it has begun treatment with an ovarian cancer patient. This treatment will be conducted using its proprietary Endoxifen compound. This treatment is moving forward due to the previously issued “Safe to Proceed” letter from the FDA.
“The patient has recurrent ovarian cancer and did not tolerate tamoxifen, which is sometimes prescribed for ovarian cancer as well as breast cancer. The patient recently underwent functional molecular genomic testing using 3D tumor organoid cultures grown in the laboratory from the patient’s tumor to help determine potential therapies. This testing revealed that the combination of Endoxifen and alpelisib produced an exceptional tumor response.”Steven Quay M.D., the CEO of Atossa Therapeutics
Currently, Endoxifen has FDA approval, which means that it could be close to commercialization. And only a month ago, the company announced the pricing of a $50 million registered direct offering. Lastly, it’s worth noting that the company is working on a Covid-19 treatment. This is one of the reasons that it has received so much attention in the past twelve months. But, as Covid cases drop, investors are now focusing on what else Atossa is doing. So, is ATOS stock going to be on your penny stock watchlist?Citius Pharmaceuticals Inc. (NASDAQ: CTXR)
Last on the list is Citius Pharmaceuticals, which develops a range of critical care products and anti-infectives. While it does have a sizable pipeline, its most prominent compound right now is known as Mino-Lok. This is an antibiotic lock solution to treat catheter-related bloodstream infections. The company is currently enrolling patients in a Phase 3 pivotal trial. This should help to get the ball rolling on this novel antibiotic as soon as possible. However, Mino-Lok has already been approved via Fast Track Designation by the FDA.[Read More] Best Penny Stocks To Buy As Cryptocurrencies Boom? 3 To Watch In 2021
Additionally, through its subsidiary NoveCite Inc., Citius is in development on a proprietary stem cell treatment made from induced pluripotent stem cells (iPSCs) to treat acute respiratory conditions. In the short term, this includes ARDS associated with Covid-19 infections. On Thursday, April 29th, the company reported strong clinical community engagement for its Mino-Lok Phase 3 trial-related webinar. While this may not seem like a big deal, it shows that the public could become more familiar with this treatment.
“We are encouraged to see strong and growing interest within the clinical community in Mino-Lok as a potential treatment option for patients with CRBSI/CLABSI. There are currently no FDA-approved therapies to salvage infected CVCs. We believe Mino-Lok has the potential to become the gold standard in CRBSI/CLABSI care, and the first and only FDA approved treatment option for salvaging catheters in patients.”Dr. Myron Czuczman, EVP and Chief Medical Officer at Citius
Although this is a niche opportunity, it presents a new and potentially profitable market for Citius to enter into. Whether this makes CTXR worth watching, however, is up to you.