With 2021 well on its way, the time to find penny stocks to buy is now. But before making any large investment, it’s important to understand what is going on in the stock market today. Given that the pandemic is still rising in severity, investors seem to be intently focused on pharma and biotech penny stocks. Not all companies focus on vaccines for the pandemic, of course. But the early attention that the virus brought to this industry can’t be ignored.
With the millions of new traders opening accounts over the last year, one of the hottest topics was “coronavirus stocks”. In my opinion, this opened the door for these new traders to gain exposure to biotech stocks, in general. It also allowed them to see just how exciting this niche can be; not to mention risky. When it comes to stocks under $5, volatility is evident. However, certain industries, including biotech, tend to have a bit more of this volatility than others thanks to higher levels of speculation.
Although the pandemic has been a travesty for the world, it has also resulted in larger investments into the biotech and pharmaceutical companies. This has resulted in many pushing out new therapeutics as well as increasing the amount of research they are conducting. One thing to keep in mind with stocks in this niche is that it takes quite a long time for drugs to gain regulatory approval. While the steps in between this process often lead to speculative gains, it is important to consider the longer-term as well. With all of this in mind, the biotech industry continues expanding in popularity. For this reason, here are four biotech penny stocks to watch in the new year.Biotech Penny Stocks to Watch
- Aileron Therapeutics Inc. (NASDAQ: ALRN)
- Assertio Holdings Inc. (NASDAQ: ASRT)
- Acasti Pharma Inc. (NASDAQ: ACST)
- Atossa Therapeutics Inc. (NASDAQ: ATOS)
As far as clinical-stage biopharmaceutical companies go, Aileron Therapeutics has captured a lot of attention. The company is currently working on several drugs to aid in the fight against cancer. This includes ALRN-6924, which is a chemo-protective agent that is currently in clinical testing. Chemotherapy is currently the main treatment for many types of cancer, and that isn’t gong anywhere soon.
But, Aileron is working on producing chemotherapy results with less side effects and without the risk of damaging healthy cells. The company states that ALRN-6924 could potentially mitigate certain side effects while also increasing quality of life for patients. On Monday, January 11th, shares of ALRN stock shot up by a staggering 42%. The main reason behind this is the announcement of a completed registered direct offering.
This offering, worth around $35.9 million, reflects the sale of around 32.6 million common shares at $1.10 per share. In addition to this, the company also completed an “at the market” offering for 9.89 million shares of common stock, adding around $12.7 million in gross proceeds to its balance sheet. Manual Aivado, CEO of Aileron, states that “with the completed offering, we are well-positioned to continue advancing toward our vision to bring chemoprotection to all patients with p53-mutant cancer regardless of cancer type of chemotherapy.”
The company plans to use these funds to conduct clinical trials of ALRN-6924, among other new research projects. With this in mind, ALRN could be one of the biotech penny stocks to watch early on in 2021.Assertio Holdings Inc.
If you’re looking for alternative pharmaceutical stocks, ASRT could be worth taking a look at. The company states that its drugs are aimed at treating specific ailments such as acute pain, neuropathic pain, and other indications. Assertio currently has a long list of drugs in its pipeline that include Cambia, Zipsor, and Nucynta IR. Together, these drugs make up the company’s large portfolio of specialized treatments. In December, the company announced that it would be restructuring its business to help reduce costs and improve ASRT’s business model altogether. Arthur Higgins, Chairman of Assertio states that “to adapt to the current market environment and maximize shareholder value, we are refocusing and substantially reducing our operating footprint, which is expected to result in significant cost savings.”
Throughout 2020, Assertio saw some big effects as a result of the pandemic. Since then, the company has looked at several ways to improve its balance sheet. This includes this restructuring plan which should reduce its annual cost base by roughly $45 million. Since 2018, Assertio has paid off more than $720 million worth of debt. This is a very substantial amount and something that investors may want to take note of.
What’s more is that as we discussed earlier this week, Assertio is restructuring and changing leadership with the ultimate goal of cost savings for the company. Looking ahead, the Q4 earnings call could be the next “event” to keep in mind. In a prior update, management said it would give more details of its restructuring milestones and achievements on that call.Acasti Pharma Inc.
The pharmaceutical industry is seeing a lot of momentum right now. Many pharma stocks have seen more popularity this year than in many years prior. Acasti Pharma is one of a handful of biotech penny stocks that continues to see bullish sentiment from investors. On January 11th, shares of ACST stock rocketed higher by around 23% heading into the afternoon session.
Volume for that same period came in at around 180 million by the end of the session. ACST’s rise on Monday is unfortunately not backed by any major news announcements which can be the case with penny stocks. ACST also saw a similar bullish run at the end of December, that also didn’t have an apparent catalyst to point to.
For some context, Acasti Pharma is currently working on its pipeline of cardiovascular focused drugs. This includes drugs that are used in the treatment of hypertriglyceridemia and more. This includes its flagship product known as CaPre, which is currently in Phase III clinical trials. Something traders may want to consider is the speculative angle on the company. Acasti is currently “exploring and evaluating a range of strategic alternatives”.
The company engaged Oppenheimer & Co to aid in this initiative. The main reason for undertaking a strategic review of the company was “to drive shareholder value”. This includes potential mergers, acquisitions, or other initiatives that involve Acasti and/or its products.Atossa Therapeutics Inc.
Another decent gainer of the day on, January 11th, was Atossa Therapeutics. By the end of the day, shares of ATOS stock had shot up by around 10% to $1.10 per share. In July of last year, ATOS hit a high of over $4 before falling back down to the $1 mark only a few months later. But, if we look at its chart, we see that it has a high correlation to news stemming from the pandemic. This is because the company is working on developing a viable treatment for the coronavirus. Early in 2020, Atossa Therapeutics began moving some of its resources from fighting breast cancer to finding a vaccine treatment. As of a month ago, the company was in a Phase I study to see the efficacy of its drug, AT-301.
This is a nasal spray that can be taken at home by those suffering from the coronavirus. Currently, the FDA has yet to approve any therapies that patients can use to treat covid at home. This is one of the major reasons that this is such a big deal. Back in November, the company stated that preliminary studies showed a high degree of safety in this product and that it was well tolerated by patients.
The company states that it would like to partner with covid-testing businesses, to offer point-of-diagnosis treatment options. This would be a major step for Atossa, and one that would be beneficial as case counts rise around the world. One thing to consider is that the approval processes will definitely take time to complete. But with fresh cash that was raised earlier in January, the company could be positioning for more progress and is something worth watching.Final Thoughts On Biotech Penny Stocks
If you’re looking for certain areas on the stock market experiencing a boom, biotech is clearly one of them. The first quarter of last year saw a big focus mainly on vaccine stocks. That has since evolved into looking for companies working on treatments for numerous indications. With industry ETFs like the NASDAQ Biotech ETF (NASDAQ: IBB) testing all-time highs, it’s clear that the market is interested. Now it will come down to which names should be on your watch list early this year.