5 Biotech Penny Stocks Trending This Week
In the past twelve months, biotech penny stocks have become all the rage. Regardless of whether they are working on a covid treatment, investors have shown a massive propensity for penny stocks in the biotechnology industry. The term biotech is more or less all-encompassing.
Because of the pandemic, interest in biotech companies has helped usher in a major capital amount. While we have to consider that covid may not be around forever, there are plenty of biotech penny stocks working on groundbreaking treatments.
One thing to keep in mind is that we have seen a great amount of volatility enter the biotech space in the past year. This is quite normal for penny stocks and is something that should be expected. And with the newfound entrance of retail traders, speculation has become supreme. Given that biotech companies tend to put out many press releases and announcements, the speculation in this industry is very high.
With that in mind, investors should stay focused on the companies with the best short and long-term prospects. This means pouring through press releases to see which company may have the best chance at success. With all of this in mind, let’s take a look at five biotech penny stocks that are hitting some momentum scanners this week.
Biotech Penny Stocks to Watch
- Onconova Therapeutics Inc. (NASDAQ: ONTX)
- Mereo BioPharma Group (NASDAQ: MREO)
- Verastem Inc. (NASDAQ: VSTM)
- Invivo Therapeutics Holdings Corp. (NASDAQ: NVIV)
- Oncolytics Biotech Inc. (NASDAQ: ONCY)
Onconova Therapeutics Inc.
Onconova Therapeutics Inc. is a company that continues to come onto our radar. Since the end of January, shares of ONTX stock are up by almost 80%. This solid gain represents both the bullish interest in biotech penny stocks and ONTX stock independently. On Tuesday, February 16th, shares of ONTX gained around 10% by EOD on news announced after the close.
This afternoon, Onconova announced that it had closed on an offering of 28.75 million shares of common stock at $1 per share. Capital-raising measures like these are quite common in the biotech industry. This is because they allow for R&D and the funding of corporate purposes while drugs are still in development.
The majority of revenue for biotech companies comes from either licensing of compounds or commercialization of a drug. But, these two aspects take quite a long time to complete. It involves a long and arduous process with the FDA and millions of dollars in funding. In a recent announcement, Onconova stated that the FDA had given it permission to study ON123300 with a New Drug Application.
Steven Fruchtman, CEO of Onconova, stated that “we are grateful to receive this timely, favorable response from the FDA to initiate a Phase I trial with ON123300. We are advancing the process to secure Institutional Review Board approval and affirm our expectation that the first patient will be enrolled during the first half of 2021.”
Mereo BioPharma Group
Mereo BioPharma is another biotech company that has been working on fundraising in the past few months. On February 12th, the company announced that it had closed a public offering at a price of $2.90 per share. The gross proceeds from this offering should come in at roughly $115 million.
A few months ago, the company announced that it collaborated with Ultragenyx Pharmaceutical Inc. (RARE) regarding the drug known as setrusumab. Under the term of the agreement, Mereo will receive an upfront payment of $50 million, and will have its global development program completely funded by Ultragenyx. Also, if certain milestones are met, Mereo could receive up to $254 million.
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Lastly, Ultragenyx will pay a tiered percentage royalty to Mereo for any sales made outside of Europe. Given that setrusumab has already received orphan drug status from the FDA and EMA, it looks like this deal could be promising for both companies. Tuesday, a slew of Schedule 13G’s came out showing institutional interest from Baker Bros. Advisors, Boxer Capital, Vivo Capital, and Citadel Advisors. This seems to have sparked some stronger bullish sentiment during after-hours trading.
Verastem Inc. is a biopharmaceutical company currently working in the field of oncology. The company has a large pipeline of compounds that all work to inhibit cancer growth and treat existing cancer diagnoses. Its focus is on producing novel small molecule drugs that inhibit pathways that cancer cells utilize to grow in the body. This includes its drug VS-6766, which is currently being trialed with defactinib.
A few months ago, the company announced that it is seeking FDA approval for the combination of these two substances. The goal is to treat KRAS mutant non-small cell lung cancer in a variety of patients. Brian Stuglik, CEO of Verastem, stated that “currently available options for patients with KRAS…are associated with minimal efficacy, as well as resistance and toxicity issues. Our study will further elucidate the impact of VS-6766, alone or in combination with defactinib, overcoming these challenges to improve outcomes.”
Similar to Mereo, Verastem had 6 Schedule 13G’s hit Tuesday afternoon. In particular, they showed several firms holding 0 shares of VSTM. However, one specifically from Baker Bros. Advisors showed the firm holding a 6% stake in the company. Needless to say, shares surged after hours on Tuesday.
Invivo Therapeutics Holdings Corp.
Another interesting biotech company that we’ve been covering for some time now is Invivo Therapeutics. Unlike the others on this list, Invivo works by producing biomaterials to treat various spinal cord injuries. This is an exciting area of the biotech industry and could have a lot of potential in the future. The company was founded back in 2005, with a proprietary technology produced at MIT.
Now more than 15 years later, the company has advanced this technology. On Tuesday, February 16th, the company announced the publication of its study in a peer-reviewed neurosurgery journal. While this may not seem like a big deal, publications of these studies are extremely pertinent to seeing a treatment hit the market. After a six-month study, the company deduced that there might be a large benefit in using its Neuro-Spinal Scaffold technology.
Richard Toselli, CEO of Invivo, stated that “it was rewarding to see our manuscripts on the six-month INSPIRE 1.0 results published in the peer-reviewed Journal of Neurosurgery: Spine, and we want to thank the investigators and staff at each of the clinical trial sites as well as the patients, who help us remain optimistic that this data supports the continued clinical investigation of the Neuro-Spinal Scaffold in our INSPIRE 2.0 study.”
This exciting news should help to bring in a lot of attention to Invivo. Again, it will probably take an indiscriminate amount of time to see these scaffold products hit the broader market. But in the meantime, this is definitely a promising development. Whether this makes NVIV a penny stock to watch is up to you.
Oncolytics Biotech Inc.
Oncolytics is another biotech company that is working on producing substances to aid in the treatment of cancer. The company’s flagship product, known as pelareorep is an immuno-oncolytic virus administered via an IV.
The company states that this compound may have efficacy when used synergistically with other cancer-treating compounds. It is now awaiting the registration of a Phase 3 trial for this substance in treating breast cancer. A few months ago, the company announced that pelareorep with checkpoint inhibitors had shown a great deal of clinical synergy. While this may sound complicated, it basically means that early trials are showing high efficacy.
Pelareorep works as a booster alongside existing checkpoint inhibitors. This hopefully will allow for better treatment of cancers. In the AWARE-1 study that Oncolytics is working on, the company aims to gain enough information to move toward a Phase 3 trial swiftly. In the study so far, more than 70% of patients produced a favorable result with this treatment. And while the study only consisted of 18 individuals, the data is still highly encouraging.