biotech Penny Stock to watch

If you’re unfamiliar, penny stocks are classified as a stock whose share prices are under $5.  Known for massive spikes and high volatility, penny stocks appeal to investors who can tolerate risk.

Biotech penny stocks: Inovio (INO) and Verastem (VSTM) have attracted investors based on what thes companies may have as far as the potential to generate some large returns.

Biotech Penny Stock #1: Inovio Pharmaceuticals, Inc. (INO)

Inovio’s share price and its average number of outstanding shares have really separated over the last five years.  The problem seems to be the company’s sluggish pace to develop their pipeline.  VGX-3100, its HPV-related cervical precancer drug, for example took an extremely long time to enter late-stage development after a successful mid-stage trial.  This approach leads to repeatedly diluting shareholders to fund the company’s operations.

The upside here lies in whether VGX-3100 meets its primary endpoint in the current pivotal trial, in which the vaccine is predicted to generate over $600 million in sales by 2024 according to EvaluatePharma.  However, keep in mind that VGX-3100 will not be ready for a regulatory filing until at least 2021 and the company will probably continue to dilute its shareholders until then, but top-line results could send this penny stock soaring. 

Biotech Penny Stocks #2: Verastem, Inc. (VSTM)

Like Inovio, Verastem’s share price and average share have significantly separated over the last five years.   In spite of this, Verastem got the green light from the U.S. Food and Drug Administration late last year for its drug Copiktra, a later in-line treatment for lymphoma and leukemia. Wall Street has Copiktra’s peak sales estimated between $500-$800 million and if the drug generates anywhere near these figures, this biotech penny stock’s current share price would be significantly undervalued.

However, investors haven’t accepted these attractive estimates just yet, as the drug’s launch is off to a slow start, needing to gain much more momentum. Yet, there is still the chance of high commercial sales, leaving the possibility of a huge upside on this penny stock. But, if things don’t go as planned, the company will continue to burn through cash creating more dilution.


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