5 Penny Stocks For Your Biotech Watch List In Q1 2021
When it comes to penny stocks, traders look for volatile sectors & industries. One of the more volatile sectors in the stock market today is biotechnology. Many different factors go into this. The main element is how the industry oversees companies themselves. Let me explain.
Most biotech companies work on “novel” treatments or technology for a broad range of things. It may be a new cancer drug, or it could be a medical device for diagnostics. No matter what it is, these companies and their pipeline treatments & products need to gain approval. In the US, this mostly deals with the Food & Drug Administration. Then you’ve got many organizations abroad that handle this type of oversight.
It’s not a process of “here’s a product, the FDA approves it, then the company starts generating revenue.” The process is usually much more lengthy and involves a lot more steps. For companies, this can be an arduous and costly process. But, it can offer up quite a lot of catalysts to spark longer or shorter-term moves in biotech stocks for traders.
Now, let’s talk about penny stocks. These are stocks trading under $5 per share and are volatile on their own. No matter what the industry, for the most part, stocks under $5 tend to fluctuate in price and, in turn, percentage gains or losses. Pair these with a volatile industry like biotechnology, and you may have a perfect storm for some wild swings. This is something that constantly attracts investors and day traders alike. Not only do you have the potential to see these companies during their emerging stages, but you’ve also got many different catalysts to consider as catalysts.5 Top Biotech Penny Stocks To Watch In Q1
- Sesen Bio Inc. (NASDAQ: SESN)
- Histogen Inc. (NASDAQ: HSTO)
- Atossa Therapeutics Inc. (NASDAQ: ATOS)
- Diffusion Pharmaceuticals Inc. (NASDAQ: DFFN)
- Lineage Cell Therapeutics, Inc. (NYSE: LCTX)
In this article, we’ll discuss 5 biotech penny stocks to watch this quarter. These aren’t just names that’ve been trending. They’ve also got upcoming events this quarter that could present interesting catalysts in the stock market. Will they be on your list?Sesen Bio Inc.
Something you’ll notice on this list of penny stocks is that many have been discussed previously. For those who’re new to our articles, feel free to check on these companies’ stock profile pages for previous curated content. You can also download an updated stock report on them for free.
Sesen Bio is one of the biotech stocks we’ve discussed over the last few months. The company specializes in cancer treatments. In particular, the company has reached a few key milestones in the development of its Vicineum treatment for BCG-unresponsive on-muscle invasive bladder cancer. The company submitted a Biologic License Application in December. Following this, Sesen was invited to an Application Orientation Meeting to familiarize the FDA with the treatment. To bring Vicineum to market quickly, this is an important meeting to have.
For those with SESN stock on their list right now, this could also be a crucial week ahead; and a risky one at that. Whenever it comes to FDA-related event dates, it’s almost like earnings. A good result, and the market usually reacts favorably. A bad outcome, and many times it’s “look out below.” In this case, Tuesday (2/16) is when the company expects to learn if the BLA was accepted for filing or not. The company also hosts a business update conference call before the market opens.
Again, this could be a high-risk situation depending on the outcome so if SESN stock is on your list, it’s important to remember that. Read more on Sesen Bio.Histogen Inc.
This year has been a much different year for Histogen. Considering that the company finished 2020 at all-time lows, the last few weeks have been much different. In fact, since the start of 2021, HSTO stock has climbed more than 140% after reaching highs of $1.95 last week. The rally began after the company raised $14 million to start the year, focusing on developing its current products. Histogen is a clinical-stage therapeutics company developing potential restorative therapeutics that trigger the body’s natural process to repair and maintain biological function.
Right now, attention is on the company’s Investigational New Drug application package for a Phase 1/2 clinical trial of HST-003. This is the company’s platform intended to regenerate hyaline cartilage in combination with a microfracture procedure. The FDA put the submission on hold pending more questions that arose. In particular, the FDA explained that it would provide written notice by February 12th. Yet nothing has been recorded recently.
However, something that may be in the back of trader’s minds right now is what was announced in December. The company expects to release Week 26 Final Study Results for HST-001 in “early Q1 2021.” Considering we’re in the middle of the first quarter, this could be one of the speculation drivers at the moment. HST-001 is Histogen’s therapeutic for hair loss. Considering no firm dates were given, it is unknown when the information will actually be presented. Read more on Histogen Inc.Atossa Therapeutics Inc.
Since mid-December, Atossa Therapeutics has been one of the biotech penny stocks to watch. This is due, in part, to the company’s numerous pipeline candidates. Atossa is working on treatments for both breast cancer and Covid-19. Similar to Histogen, the first quarter has become the center of attention for specific treatment updates. This is specifically for Atossa’s Covid drug pipeline and includes AT-301 Nasal Spray & AT-H201 Inhalation Therapy.
AT-301 is being developed for at-home treatment of COVID patients who don’t require hospitalization. Atossa completed successful in-vitro testing followed by a Phase 1 clinical study last year. Preliminary data showed safety and that the treatment was well-tolerated. After feedback from the FDA from a pre-IND meeting, the company outlined its clinical and regulatory strategy. Final data from this study is expected this quarter.
As far as AT-H201 is concerned, it’s actually a combination of two drugs already approved by the FDA to treat other diseases. Last May, Atossa completed in vitro testing of AT-H201 that showed the components of AT-H201 inhibit SARS-CoV-2 infectivity of VERO cells, a standard cell type being used to study infectivity of the coronavirus. The company said AT-H201 elements were “found to be at least four times more potent than remdesivir and at least 20 times more potent than hydroxychloroquine.”
Based on its success with other clinical studies in Australia, Atossa applied to the regulatory authorities to conduct the initial clinical study of AT-H201 in Australia. Atossa anticipates receiving it this quarter as well. Read more on Atossa Therapeutics.Diffusion Pharmaceuticals Inc.
Another one of the biotech penny stocks to watch is Diffusion Pharmaceuticals. It has experienced a strong move during the first few weeks of the year. However, on Friday, the penny stock gapped down aggressively after funding news. Diffusion announced a $10 million bought deal of stock at $1.025 per share. Considering that the day prior, DFFN stock had closed at $1.34, this was a steep discount.
Once the market had time to digest the news, however, DFFN stock began climbing. It even closed the gap at one point after reaching highs of $1.35 during the tail-end of the lunch hour. This could have had to do with the company’s outlined use of proceeds. This included developing its lead product candidate, trans sodium crocetinate (TSC), including the transcutaneous oximeter Study, the diffusing capacity of the lungs for carbon monoxide Study, and other clinical trial activities.
TSC has been indicated as a potential therapeutic for Covid patients. It dosed the first two patients in a Phase 1b clinical trial evaluating TSC in hospitalized COVID-19 patients (the 100-303 COVID Trial). The company put together an external safety monitoring committee, set to hold its initial meeting to evaluate the final dose group’s data on Friday. In a November update last year, Diffusion said that it expects topline data to be available by the end of this quarter. Read more on Diffusion Pharmaceuticals.Lineage Cell Therapeutics, Inc.
Unlike other names on this list of penny stocks, Lineage has actually experienced a banner last 11 months. Since March of 2020, LCTX stock had climbed from around 60 cents to as high as $3.10 last week. This massive move hasn’t come by chance. Lineage continued executing on the development of its pipeline of cell therapies. In particular, it’s been focusing on OPC1, its oligodendrocyte progenitor cell (OPC) allogeneic transplant for the treatment of acute spinal cord injuries.
This month, Lineage entered into an exclusive option and license agreement with Neurgain Technologies, Inc. Neurgain is a medical device company commercializing technology developed by neurosurgeons at the University of California San Diego. This agreement sees Lineage and Neurgain collaborating on the clinical testing of Neurgain’s novel Parenchymal Delivery Injection system, which is designed to allow for the administration of cells to the spinal cord without stopping the patient’s respiration.
Lineage also will be hosting an OPC1 Investor and Analyst Day on February 22nd, providing details on recent OPC1 milestones and plans for 2021.
[Read More] 4 Penny Stocks To Add To Next Week’s Watch List
Aside from the OPC1 developments and recent agreement with Neurgain, there is another potential upcoming milestone to keep track of. This is related to its Phase 1/2 study of its OpRegen® to treat dry age-related macular degeneration. The company is expected to present new and accumulated OpRegen data on two occasions during the first and second quarters of 2021. Patient enrollment for its clinical of VAC2 to treat non-small cell lung cancer is also expected to come to completion this quarter. With so much going on, there’s a lot to keep track of with LCTX stock. Read more on LineageCell Therapeutics.Biotech Penny Stocks To Watch
These biotech penny stocks are on watch, thanks to upcoming events this quarter. Some of these are more near-term than others. Needless to say, it could present a risky scenario. Again, the outcome of these events could trigger big moves (in either direction) for these penny stocks. With that in mind, will any of these be on your watch list heading into the second half of Q1?