If there is one sector that has managed to generate handsome returns over the course of the past two decades, it’s the biotech sector. The reason behind the sector’s growth is innovation and the range of new products coming to the market. Hence, things like biotech penny stocks will always have interested investors.
Since there is always the possibility of small biotech firms coming up with major breakthroughs, biotech penny stocks could present a good opportunity. However, it is important to keep a close watch on the market before deciding to buy penny stocks in general. Biotech stocks are volatile as it is.
Now, throw in the fact that there are biotech penny stocks and that volatility could be even greater. Needless to say, if you can stomach big swings, take a look at two penny stocks that may find a place on a penny stocks watch list. Can they continue higher next week?
Biotech Penny Stocks To Watch #1Catalyst Pharmaceuticals
Catalyst Pharmaceuticals (CPRX Stock Report) stock was in the news on Wednesday after it published its financial results. These were for the second quarter and proved to be a disappointment for the market. The results for the quarter were announced on Tuesday evening after the close of the market.
However as soon as the markets opened the next day, CPRX stock took a nosedive. Shares dropped as much as 12.3% as short-sellers swarmed the stock. The more interesting part is that it recovered quickly and only ended lower by 1%.
The primary reason behind the pessimism about the company is related to the emergence of a threat to its flagship medicine Firdpase by a rival drug. It remains to be seen how the stock behaves over the coming days. However, since dropping, shares are once again approaching new 3 month highs. Heading into next week, Catalyst stock is trading sideways on Friday but is it set to move higher still?
Biotech Penny Stocks To Watch #2 Achillion Pharmaceutical
Another biotech penny stock to watch heading into next week, Achillion Pharmaceutical (ACHN Stock Report). This stock has been one of the top penny stocks to watch among biotech penny stocks in 2019. The stock has been on a tear over the past six weeks going up by as much as 100%. The primary reason behind the optimism about the stock stems from highly promising its Phase 1 clinical study. This focuses on the company’s experimental oral factor D inhibitor drug, ACH-5228.
As a matter of fact, there are experts who believe that the product has the chance of getting approval as well. Obviously, in such a situation, optimism about the stock is fully understandable. But that doesn’t automatically make this a penny stock to buy or even one to add to your list of penny stocks. Phase 1 data is great but there’s still a long road ahead for the company.
The next few months are going to be vital for the company as it looks for ways to clear the next stages of clinical studies. The ultimate goal is getting formal approval. But again, this could be a long road to come. In the end, can this week’s momentum spark continued momentum next week?