Hot Penny Stocks to Watch If Biotech is Your Focus
Investors continue looking for the best penny stocks to buy. With the way the stock market has been lately, that’s easier said than done. But the potential that these cheap shares bring is unlike anything else out there.
If you thought Reddi stocks like GameStop (NYSE: GME), Express (NYSE: EXPR), or Nokia (NYSE: NOK) were volatile, you need to check out penny stocks. By definition, they are shares of companies trading for less than $5. With that comes the opportunity of seeing “GME-style” moves daily.
These have also become a fan favorite of the Reddit community. Since you can make so much money in such a short amount of time, the appeal is clear. But it’s also important to understand that there are risks involved. One of these is also related to volatility. Remember, stocks don’t always go up in a straight. When you look at penny stocks today, remember that.
How To Find Penny Stocks
If you’re asking, “How do I find penny stocks?” you’re in the right place. You can check out Penny Stocks Trading for Beginners for a more detailed explanation. In the meantime, I can give you some quick tips. Generally speaking, most cheap stocks will move with a trend. That trend usually begins with what are known as catalysts. These can be anything from news headlines and filings to rumors and speculation. Whatever the case, make sure to do your research first.
Where’s a trend right now? In the stock market today, we’ve seen a few sectors pop. One of which is biotech. This niche in the market is well-known for its volatility. What could be even more interesting is the fact that the sector saw a strong rebound on Thursday. Will that continue into the weekend? We’ll have to see, and here are a few biotech penny stocks to add to the watch list right now.
Biotech Penny Stocks to Watch
- Seelos Therapeutics Inc. (NASDAQ: SEEL)
- MannKind Corp. (NASDAQ: MNKD)
- Salarius Pharmaceuticals Inc. (NASDAQ: SLRX)
- Immutep ADR (NASDAQ: IMMP)
- Opko Health Inc. (NASDAQ: OPK)
1. Seelos Therapeutics Inc. (NASDAQ: SEEL)
Shares of Seelos Therapeutics have seen several days of double-digit gains in the past few months. Thursday was one of these bigger days but no apparent catalyst was immediately identified.
Earlier this month, Seelos received a Buy recommendation from BTIG and a price target of $14. Based on the closing price from March 25th, that’s a forecast of over 200% right now. The upgrade comes as Seelos made several key announcements in the past few weeks. The company completed enrollment in its proof of concept study for SLS-002 in treating acute suicidal ideation and depression. Seelos expects to report data from this pivotal study as soon as the second quarter of this year.
Raj Mehra, CEO of Seelos, stated that “our first look at the potential efficacy of SLS-002 in depressed and imminently suicidal patients should provide valuable insights in this large unmet need. We look forward to initiating Part 2 of this study and are continuing to identify more trial sites.”
The company is also moving its SLS-005 treatment into a Phase 2b/3 study to see if it can be effective at treating ALS disorder. On March 25th, we saw many biotech penny stocks move substantially higher during the trading day. With this latest trend in biotech and pending data readouts next quarter, SEEL could be one of the penny stocks to watch right now.
2. MannKind Corp. (NASDAQ: MNKD)
MannKind is a company that we’ve covered for several months. It develops and commercializes a broad range of inhalable therapeutics. These are used in a variety of endocrine and orphan lung diseases.
Its lead compound, Afrezza, is a first of its kind, insulin product that can be inhaled. Afrezza is currently FDA approved and is available via prescription in the U.S. and Brazil. Earlier this month, MannKind announced the closing of an additional $30 million in convertible senior debt notes due 2026. This brings the total proceeds of this offering to approximately $222.9 million.
The use of proceeds is something to keep in mind. A quarter of a billion dollars isn’t small and MannKind has set its sights on several targets for this cash. The company will use the net proceeds for a Phase 3 clinical trial of Afrezza in pediatric subjects. Capital will also be directed toward the further development of product candidates in MannKind’s pipeline. Paying down a portion of existing debt and potential acquisitions or strategic investments have also been highlighted in the use of proceeds.
In its 2020 fourth-quarter financial report posted last month, Afrezza brought in $10.1 million in revenue. This is 30% more than it did in Q4 2019. Furthermore, it realized a 105% increase over Q4 2019 in its gross profit, totaling $6.4 million for the fourth quarter of this year. With cash in hand and plans to deploy it on things like a Phase 3 trial, MNKD is another one of the biotech penny stocks to watch.
3. Salarius Pharmaceuticals Inc. (NASDAQ: SLRX)
Salarius is a clinical-stage biopharmaceutical company that is developing cancer therapies. Its current lead product candidate is known as Seclidemstat. This compound is being studied to treat pediatric cancers, solid tumors, and other cancers. It is currently in a Phase 1/2 study for relapsed Ewing sarcomas. Because there are few treatment options for those suffering from Ewing sarcoma, the company sees a large market opportunity. Also, Seclidemstat is in another Phase 1/2 trial to see its efficacy in treating advanced solid tumors. This includes those found in prostate, breast, and ovarian cancers.
On March 18th, Salarius Pharmaceuticals announced its fourth quarter and full-year 2020 results. While it did report a net loss of $7.4 million for 2020, the company still ended the year with more than $11.1 million in cash and cash equivalents. This is a large increase from the $3.7 million it held at the end of 2019.
CEO David Arthur explained that “in 2021, we continue to develop our differentiated LSD1 inhibitor, Seclidemstat, for the treatment of cancers with high unmet need. During the fourth quarter of 2020 and through early 2021, Salarius achieved two key objectives that are important for the future of the company.” He goes on to state that these two objectives are the dose-escalation stage of the first trial mentioned, and the “strengthening of our finances.”
4. Immutep (NASDAQ: IMMP)
While no company-specific news came out on March 25th, Immutep enjoyed a more than 40% gain. This could be due to the broader biotech bullishness during the session. Recently, Immutep announced a new Phase 2b clinical trial to study the compound IMP321 for head and neck squamous cell carcinoma.
This study will be done via a collaboration and supply agreement with Merck & Co Inc. (NYSE: MRK). The trial known as TACTI-003 will test IMP321 in combination with Merck’s Keytruda compound. This will help to show the efficacy of IMP321 both comparatively and on its own.
The CEO of Immutep, Marc Voigt, stated that “we are excited to be deepening our collaboration with MSD through this second agreement and the TACTI-003 clinical trial. Advancing to this later stage Phase IIb trial will allow us to explore the combination therapy in the commercially relevant 1st line therapy setting which has a high unmet medical need.”
The company states that this type of cancer is the sixth most common in the world. Yet despite this, it still has little to no effective approved treatments. In addition to this compound, Immutep has several others in its pipeline. This includes the development of IMP761 for autoimmune diseases, among others. While it will take some time for this trial to play out, IMMP could be worth watching.
5. Opko Health Inc. (NASDAQ: OPK)
Opko Health is another biotech penny stock that’s been on our radar recently. The company has several operating businesses ranging from therapeutic development to COVID testing. It’s that latter that is turning heads this week.
Opko’s BioReference Laboratories Inc. expanded its COVID-19 school testing program to support a return to in-person classes. This latest development adds to the company’s current testing services already provided to nearly 200 schools to date.
This hasn’t been the only thing driving momentum in the stock. Insider activity has also played a factor. This month, there was a notable insider buy from CEO Phillip Frost. A buying spree showed Frost picked up nearly 300,000 shares. As with many instances of insiders adding to a position, this was seen as a positive, and OPK has climbed roughly 7% since the purchases were reported.
Biotech Penny Stocks To Watch This Month
As with all hot industries, keep risk and reward in mind. Biotech is well-known for its volatility, and when paired with low-priced stocks, it can make for a wild market. Now that stocks have begun rebounding following a lull earlier this week, some of the more active industries like biotech could be on the radar for traders before April.