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11 Best Biotech Stocks Under $1 to Watch in May 2022

Haiden Holmes

Apr 29, 2022 16:40

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Millions of lives have been saved as a result of medical advancements in the last two decades. Participating in the development of innovative medical technologies can be quite profitable for investors. 


Big pharma is enormously profitable, and innovation thrives in environments where revenues are generated. 


On the other hand, investment in biotech stocks is all about making the proper choices, as not all stocks are made equal.

What Are Biotech Penny Stocks?

Due to the coronavirus pandemic, biotech stocks have had a tumultuous year. Traders are betting on several biotech stocks in the hope that these companies may develop a Covid-19 vaccine. Numerous biotech stocks trading under $1 see wild swings in their stock prices.


Investing in biotechnology stocks resembles gambling more than investing. Numerous biotech stocks rely on great news to make significant movements, only to see their stock prices revert to pre-news levels once the news has passed.

What You Should Know About Biotech

Biotechnology is a field of research that focuses on the development of therapies and goods via the use of cellular and biomolecular processes.


Biotechnology is a broad term that incorporates a variety of uses that go beyond conventional medications such as antibiotics and vaccines.


Additionally, plant-based biofuels, cosmetics, food processing technology, and even microorganisms employed to clean up oil spills are all possible applications.

Status of Biotech stocks

At the onset of the pandemic, biotech stocks were among the greatest performers. They have, however, significantly underperformed the overall market in recent years.


In 2021, the SPDR S&P Biotech (XBI) index lost 20.5 percent, compared to the S&P 500's gain of 26.9 percent. And the XBI is currently down 27.1 percent in 2022, compared to the S&P 500's loss of 10.4 percent.


A portion of this underperformance can be attributed to the high number of tiny, early-stage biotech companies that capitalized on the economic recovery and a burgeoning initial public offering (IPO) market. In 2021, 96 biotech companies will go public, up from just eight in 2011. Many of these companies possessed only a few patents and generated little to no money.


And while many biotech stocks fail to owe to a lack of product efficacy or safety, the industry continues to attract investors due to the potential for skyrocketing stock values for companies that produce beneficial medicines. Additionally, the biotech industry is continually researching and developing new medicines.


Perhaps the most alluring aspect of biotech stocks is their independence from geopolitical risk and economic uncertainty - two topics that dominate contemporary headlines.


Thus, while it is well-known that investing in this area is risky and difficult, there is opportunity.

What Does a Biotech Company Do?

Biotechnology companies create drugs, therapies, and vaccines to address a variety of health problems. These stocks increased in value with the announcement of new vaccines in 2020 and 2021.


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However, it is not all roses and sunshine for biotech stocks. Drugs and therapies take a long time and significant financial investment to create. And it may be thrown away if the FDA does not approve.


What, therefore, makes these stocks worth monitoring? Why are they so popular with traders?


A single piece of news or a catalyst can trigger large, volatile runs. If you're prepared, you can swoop in and seize the initiative. However, volatility entails danger, so you must be prepared for the action.

Why should we invest in Biotech stocks?

Over the last several decades, innovation and developments in science and technology have altered the field of medicine. More than any other market sector, the biotechnology industry exemplifies this rate of change. According to Grand View Research, the worldwide biotech market is predicted to increase at a compound annual growth rate of more than 15% over the next seven years, reaching $2.4 trillion in 2028. Retail investors on internet forums such as Reddit have poured money into biotech stocks with the aim of profiting from this growth.


The new coronavirus was and continues to be an unrelenting force, plowing over the world's most populous regions like a cyclone. According to data from Worldometers.info, 4.86 million individuals had died worldwide from the SARS-CoV-2 virus at the time of writing. However, like with any tragedy, this one will pass. Regular people hoping to regain their life are not the only ones anticipating 2022; speculators seeking to profit from penny stocks are also anticipating the new year.


Of course, the desire to benefit from the capital market is not new; it is one of the factors that contribute to our humanity. However, this moment is unique due to the pandemic's once-in-a-century nature. Indeed, you could describe it as a one-of-a-kind situation that has never been seen before. Penny stocks in this area may gain from a combination of unparalleled access to numerous investment markets and increased interest in biotech.


Generally, a single main catalyst dominates this otherwise highly speculative environment. With the Covid-19 situation diminishing steadily on both the local and international fronts, we may be nearing the end of this catastrophe. If this is the case, biotech penny stocks may prosper as the underlying business refocuses on other critical acute and chronic illnesses. Even if Covid-19 persists, companies that focus on specific aspects of the disease may see an increase in value.


Pfizer Inc. (NYSE: PFE), Eli Lilly and Company (NYSE: LLY), AbbVie Inc. (NYSE: ABBV), Bristol-Myers Squibb Company (NYSE: BMY), Abbott Laboratories (NYSE: ABT), and GlaxoSmithKline plc (NYSE: GSK) are among the biotech stocks that are now popular on the platform. However, the pandemic's impact has driven these firms' values to all-time highs, putting them beyond the reach of average investors flocking to biotech penny stocks that offer similar growth at a lower price.


Investors seeking exposure to biotech companies should consider industry growth catalysts such as the expansion of digital diagnostics, the creation of tailored medicine, and an increase in collaborations between different pharmaceutical companies. According to a Centers for Medicare and Medicaid Services projection, the US has already hit $3.8 trillion in national health expenditures by 2019, prior to the pandemic. This amount has risen quickly over the last year and a half and appears set to rise higher when new strains of the virus emerge.

Best Biotech Penny Stocks Under $1

1. Cellectar Biosciences, Inc. (NASDAQ: CLRB)

Cellectar Biosciences is a New Jersey-based company focused on developing next-generation cancer therapies.


The company is now pursuing this goal using its patented phospholipid drug conjugate (PDC) platform.


Cellectar Biosciences, Inc.'s continued development of its PDC platform will result in the subsequent-generation cancer medicine being a welcomed addition to the market. PDC may also help the firm expand in the sector.


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Cellectar Biosciences Inc. may be a good purchase if you're looking for high-yielding stocks. According to projections, the stock price is expected to reach $56 per share in 2026. The company's cash outflow has surged dramatically over the last year as it works toward approval.

2. Synthetic Biologics (NYSE: SYN)

One of March's biggest movers, Synthetic Biologics, has resurfaced on the radar following a retracement to February levels. The company was on watch lists last month as a result of operational highlight news, which the market interpreted as a bullish driver.


Synthetic discussed the acquisition of oncology company VCN Biosciences and the recent designation of its VCN-01 platform as an orphan drug. Synthetic Biologics' candidate for retinoblastoma treatment is VCN-01. According to the Journal of Immunotherapy for Cancer data, the treatment appears to have an acceptable safety profile. As a result, management aims to initiate additional international studies this year, including a Phase 2 trial of IV VCN-01 in combination with standard of care chemotherapy in metastatic pancreatic cancer.

3. Regulus Therapeutics Inc. (NASDAQ: RGLS)

Regulus Therapeutics Inc. (NASDAQ: RGLS) is a biopharmaceutical company focused on the development of microRNA-targeted therapeutics for the treatment of rare disorders. According to Reddit, it is placed fifth on our list of the top ten biotech penny stocks to purchase. On May 13, the company reported first-quarter profits per share of -$0.08, exceeding market estimates by $0.01. The company has a market capitalization of $54 million and had revenue of more than $10 million last year.


On May 14, investing stock HC Wainwright reiterated its Buy recommendation on Regulus Therapeutics Inc. (NASDAQ: RGLS) and increased the price target to $2 from $1.5, citing favorable topline data from a recent medication study and first-quarter earnings.


At the end of Q1 2021, six hedge funds in Insider Monkey's database held holdings in Regulus Therapeutics Inc. (NASDAQ: RGLS), totaling $14 million, up from four in the previous quarter totaling $11 million.

4. Brickell Biotech Inc. (NASDAQ: BBI)

Brickell Biotech is one of the more fashionable (and less priced) biotech penny stocks. We've been mentioning this company for the last few weeks, and the market appears to have taken note as well. The prescription therapeutics corporation has developed into a leader following last month's profit replacement and outlook.


Brickell stated specifically that it intends to expand its immunology and irritant treatment pipelines following the acquisition of the rights to its BBI-02 candidate. Additionally, the company stated that the start of a Phase 1 study for BBI-02 in treating autoimmune and inflammatory diseases remained on track for this quarter.


"We are continuing to work toward a mid-2022 NDA filing for sofp. bromide gel, 15% for the treatment of primary axillary hyperhidrosis, and we are evaluating all possible options to maximize commercial product success," Brickell CEO Robert Brown explained. With this outlook and potential long-term milestones in mind, investors have been focusing their attention on BBI inventory during the last few weeks.

5. Acutus Medical Inc. (NASDAQ: AFIB)

Today, Acutus Medical's stock market has solidly recovered. The business that specializes in arrhythmia management saw its stock soar as enthusiasm for nano-cap biotech stocks grew. The company has concentrated on improving the diagnosis and treatment of cardiac arrhythmias through the use of electrophysiology. It established a solution for catheter-based treatment approaches in particular.


AFIB stock is back on traders' radars following a sharp price increase on Tuesday. Many have been watching the penny stock market decline since companies reported their fourth-quarter and full-year earnings last month. Acutus reported a larger net loss, although the firm exceeded analyst revenue projections. Looking ahead, the company anticipates sales in the first quarter of between $3.2 million and $3.5 million.

6. electroCore (NASDAQ: ECOR)

electroCore Inc is a commercial-stage bioelectronic medicine business focused on neurology with a platform for non-invasive vagus nerve stimulation therapy. In the United States, the company's product gammaCore has been cleared by the Food and Drug Administration for adjunctive use in the prevention of cluster headache in adult patients, the acute treatment of pain associated with episodic cluster headache in adult patients, the acute treatment of pain associated with migraine headache in adult patients, and the prevention of migraine in adult patients. The gammaCore has been CE-marked for the acute and/or prophylactic treatment of primary headache, bronchoconstriction, and medication overuse headache in adults in the European Union.

7. Idera Pharmaceuticals (NASDAQ: IDRA)

Idera Pharmaceuticals' stock soared during Tuesday's first hour of trading. The biotech penny stock had some of its most active tradings since January. There were no accompanying headlines to the action. However, recent events at the end of March may give light on the type of speculation swirling around IDRA stock.


Idera's fourth-quarter and full-year financial figures indicate more robust growth last year. For instance, their loss per share was much lower year over year, coming in at $0.08 versus $2.11 in Q4 2020. However, it was not always the performance that drew the market's attention.


"Additionally, we have asked JMP Securities, a Citizen's Company and our current partner and advisor on business development activities, to expand their current scope of work beyond acquisition or in-licensing opportunities to include additional strategic alternatives for the Company," said Vincent Milano, Chief Executive Officer of Idera.

8. Ibio Inc. (NYSEAMERICAN: IBIO)

Ibio Inc. owns the FastPharming manufacturing technology, which enables rapid, scalable, and safe biopharmaceutical development.


This technology enables plants to produce proteins more quickly, resulting in shorter drug trials.


The company is using FastPharming to expedite the approval of innovative therapies for fibrotic and infectious disorders and immuno-oncology.


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Although no drugs have been approved, Ibio has generated cash by selling its production technology.


With a market capitalization of more than $110 million, Ibio is juggling a lot of numbers in order to have its medications licensed as quickly as possible.


Share prices are only 50 cents at the moment, but there is a lot of possibility for growth in the future due to advancements in technology and medications.

9. Abeona Therapeutics Inc. (NASDAQ: ABEO)

Abeona Therapeutics Inc. (NASDAQ: ABEO) is ranked fourth on Reddit's list of the top ten biotech penny stocks to purchase. The company is headquartered in New York and is a biopharmaceutical company focused on the development of gene and cell therapies for the treatment of rare, life-threatening diseases. On July 28, the company reported second-quarter profits per share of -$0.16, exceeding market projections by $0.01. On July 26, the stock increased 10% following favorable results from a study investigating a medication for Sanfilippo Syndrome Type A treatment.


On July 19, investment bank HC Wainwright maintained a Buy recommendation on Abeona Therapeutics Inc. (NASDAQ: ABEO) but reduced its price objective from $8 to $5, citing a tribunal verdict against the stock, but the overall outlook remained positive.


At the end of Q1 of 2021, 7 hedge funds in Insider Monkey's database held holdings in Abeona Therapeutics Inc. (NASDAQ: ABEO), totaling $16 million, down from 11 in the preceding quarter totaling $25 million.

10. Histogen Inc. (NASDAQ:HSTO)

Histogen, a restorative therapeutics company, is the only other biotech penny stock to watch below $1 at the moment. The HSTO inventory has a history of violent breakouts (and breakdowns), as with Synthetic. Earlier this month, the penny stock soared to a record high of $0.47 following a shareholder vote on an opposing cut. This was once in response to a letter from Nasdaq warning that the corporation did not fulfill Nasdaq's minimum bid value requirements.


The corporation stated in a submission:


It is critical that your stocks are represented and voted on regardless of whether or not you intend to attend the Annual Meeting in the near future. Other methods of balloting your stocks are detailed in the section under "General Information About the Annual Meeting and Voting."

This notice of our Annual Meeting of Stockholders, along with the proxy discourse and proxy form, is being distributed and made available on or about April 21, 2022.


Given that April 21 is just around the corner, HSTO inventories may be on the watch list.

11. Kintara Therapeutics, Inc. (NASDAQ: KTRA)

Kintara Therapeutics, Inc. (NASDAQ: KTRA) is a biotechnology firm focused on the development of unmet medical needs therapies. It is headquartered in California and ranks sixth on Reddit's list of the top ten biotech penny stocks to purchase. On May 26, the company's stock price increased by more than 26% following the release of a site activation update for a mid-stage trial investigating a medication for brain cancer. The company disclosed that a treatment arm included in the trial's registration had been activated in 15 sites.


On July 1, Kintara Therapeutics, Inc. (NASDAQ: KTRA) reported excellent results from a trial into VAL-083, a medicine the company is developing for the treatment of patients with an aggressive form of brain cancer.


Nantahala Capital Management, a Massachusetts-based investment business, is a significant shareholder in Kintara Therapeutics, Inc. (NASDAQ: KTRA), with 902,677 shares valued at more than $1.5 million.

Conclusion

Biotechnology penny stocks are some of the riskiest investments available, and they can see dramatic price changes in response to favorable or negative news. However, if you're willing to exploit the volatility, these stocks can provide excellent trading chances. If you're looking for good biotech investment opportunities, the firms listed above are an excellent place to start. Without a doubt, there is no guarantee that these firms will succeed in the long run. As such, you must perform your own research or consult with a professional financial advisor prior to making any investing decisions.