Are These Biotech Penny Stocks Worth It?
Finding the best biotech penny stocks to buy can be a challenge. As with any investment, there is quite a lot of work that should go into it. While biotech stocks do trade similarly to others, there are a few nuances that investors should consider.
For one, penny stocks in the biotech industry tend to be some of the most speculative securities out there. This is due to the nature of the number of press releases that come out, and the hype that can surround any new news events. While penny stocks on their own are quite speculative, add in the layer of biotech, and it grows exponentially. However, volatility is not something to be scared of, but rather a welcome component of investing in penny stocks.
The second thing to consider is that financials can often be looked at differently with biotech stocks. With most penny stocks, investors will want to see growing revenue, profitability, and EPS. In addition, a low debt-to-come ratio is important. However, with biotech, revenue is often little to none.
This is because a biotech company will only see revenue upon either the commercialization of a product or the licensing out of a compound/device. So, with these companies, investors usually look at what compounds or devices are in the pipeline as well as its free cash balance.
Biotech businesses will often engage in multi-million offerings to raise money for trials and testing. This can result in hundreds of millions of dollars on a balance sheet. So, when investing in biotech penny stocks, consider how much cash it has on hand. And considering all this, once we throw in the Robinhood aspect, we can see even greater price fluctuations. With everything above in mind, let’s take a look at three biotech penny stocks on Robinhood with big news recently.
3 Robinhood Biotech Penny Stocks to Watch Right Now
- Citius Pharmaceuticals Inc. (NASDAQ: CTXR)
- Eloxx Pharmaceuticals Inc. (NASDAQ: ELOX)
- Sio Gene Therapies Inc. (NASDAQ: SIOX)
1. Citius Pharmaceuticals Inc. (NASDAQ: CTXR)
Citius Pharmaceuticals Inc. is a penny stock that we’ve discussed quite a few times in the past several weeks. One of the main reasons for this is the recent announcement of its listing on the Russell 2000 Index. This will take place after the market opens on June 28th of this year.
“Our inclusion in the Russell Index is an important milestone for Citius that reflects the continued progress we are making to develop and commercialize first-in-class treatment options for patients around the world.
We welcome the enhanced visibility of our diversified pipeline and long-term growth potential, and look forward to sharing our future milestones with a broader investment community.”Myron Holubiak, CEO of Citius
While being added to the Russell Index may not seem like a major deal, it will add both volume and notoriety to the company. For some context, Citius is a late-stage biopharmaceutical company working on anti-infectives and adjunct cancer care. Its leading product right now is known as Mino-Lok, which is an antibiotic lock solution for treating catheter-related bloodstream infections. Mino-Lok has already been granted Fast Track designation by the FDA, which in itself is a major milestone.
Additionally, through its subsidiary NoveCite Inc., Citius participates in the development of proprietary mesenchymal stem cell treatment. These are in use for respiratory conditions, including Covid-10 induced ARDS. With all of these big movements in mind, CTXR looks like it could have a bright future ahead. Whether it’s worth adding to your watchlist, however, is up to you.
2. Eloxx Pharmaceuticals Inc. (NASDAQ: ELOX)
Up by almost 18% at midday is ELOX stock. The big reason for today’s gain with Eloxx Pharmaceuticals is a stake from a sizable financial firm that was announced. Yesterday at EOD, Roche Finance, a unit of Roche Holding, published that they held a 5.3% ownership stake in Eloxx Pharmaceuticals. This results in the ownership of roughly 2.5 million shares of ELOX stock.
While it may not seem like a big deal, institutional investments are always consequential to any stock, let alone biotech stocks. It affirms not only what a company is doing, but what potential it could have in the future. Eloxx focuses on RNA-targeted gene therapies for rare diseases, including cystic fibrosis and others.
Only a short period after this announcement was made, the company stated that it received an award of up to $2.6 million from the Cystic Fibrosis Foundation for the identification of oral macrolide-based ribosome modulating agents.
CEO of Eloxx Pharmaceuticals, Sumit Aggarwal, states that “We are honored to receive this funding from the Cystic Fibrosis Foundation in our ongoing commitment to identify and develop new treatments for CF. Their support of novel technologies enables critical research to advance and further evaluate the potential of the TURBO-ZM to treat rare genetic diseases.”
While ELOX does work in a niche area of the market, its potential could be widespread. Considering the above news, is ELOX going to be on your list of penny stocks to watch?
Sio Gene Therapies Inc. (NASDAQ: SIOX)
Only last week, Sio Gene Therapies announced its fiscal year 2020 and year-end financial results. In addition, SIOX reported several expected milestones for the 2021 year as well. Before we get into them, let’s talk about what Sio Gene Therapies does.
Sio is a biotech company developing genetic medicines that utilize cutting-edge gene science. It offers AAV-based gene therapies for several ailments including GM1 gangliosidosis and Tay Sachs disease. Additionally, it is working on the development of these compounds for use in more prominent conditions such as Parkinson’s.
In its latest financial update, Sio announced that as of March 31st, it had more than $119 million in cash and cash equivalents. This should give it a runway up to at least Q4 2022. Additionally, Sio managed to reduce its net loss from the prior year’s fourth quarter to $3.3 million from $16.6 million. This is major and shows just how committed the company is to progress.
“At Sio, we remain committed to bringing urgently needed treatments to patients with rare pediatric disorders and adult neurodegenerative diseases. We are grateful for the steadfast dedication of patients, caregivers, investigators, and patient advocacy groups who have supported our mission in the midst of a global pandemic.”CEO of Sio Gene Therapies Pavan Cheruvu
These exciting results illustrate that Sio is advancing heavily on its goals. While a net loss is still a net loss, the substantial decrease is something to take note of. Whether this makes SIOX stock worth keeping an eye on is up to you.
Biotech Penny Stocks on Robinhood Continue to Excite Investors
Biotech penny stocks remain some of the most popular penny stocks to invest in this year. While it is difficult to predict what will happen in the future, for now, biotech is looking up. This may have begun as a focus resulting from the pandemic, however, now, investors are searching for biotech stocks that may not have a relation to Covid.
Because of this, the most important aspect is to always stay up to date on research and current events. With all of this in mind, it’s clear that biotech penny stocks on Robinhood continue to excite investors of all types.