When it comes to hot penny stocks to watch, the biotechnology sector tends to yield some big movers. Whether we’re talking higher-priced stocks or penny stocks under $1, speculation plays a big role in sector momentum. One of the top things to factor in is all of the milestones these companies strive for.
Here’s what I mean. While you’ve got tech companies or consumer good companies making announcements, the biotech newsflow is a bit different. In fact, it lends itself to more catalysts to look for. Let’s take a comparison of Apple and GlaxoSmithKline, for example. Apple might announce that on a future date, they’re going to release a new product. You may see the momentum surge during the day of that update. Then you might see the stock jump on whatever that “future date” is, depending on what was announced.
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Glaxo, on the other hand, is a biotech company. So, while it might announce that on a future date, they’ll report full results from a trial, the time in between can be just as important. During this time, there are other “events”; things like interim data, supporting data, presentations at industry conferences, etc. All of these other events tend to also act as catalysts for market momentum. Keep in mind, however, that this momentum can become both bullish and bearish.Biotech Penny Stocks To Watch
As they say, bulls take the stairs and bears take the elevator. During periods where biotech companies release negative data, the resulting move can be crushing. That’s why it’s important to do your research heading into an important reporting date. Look at most biotech penny stocks and you’ll see at least one point in its history where shares jumped hugely.
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You’ll also likely see where shares took a huge nosedive. Earlier today we talked about some biotech companies. One of them was Cassava Sciences Inc., which experienced a freefall earlier this year after missing an endpoint in one of its trials. We also talked about a company, BioCryst, that saw a huge breakout to new 2020 highs after one of its updates earlier in the year. Needless to say, there are plenty of biotech stocks to watch right now. Will any of these be on your list to buy or should you avoid them at all costs?Biotech Penny Stocks To Buy [or avoid] #1: Mallinckrodt Plc
Mallinckrodt Plc (MKN Stock Report) is a company we’ve written about before. During 2020, MNK stock has been very volatile. There’ve been periods of huge jumps and periods of considerable pullbacks. The company manufactures, markets and distributes specialty pharmaceutical products and therapies.
Its areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; analgesics and gastrointestinal products. MNK stock dropped in August after reporting that it nad most of its subsidiaries could soon file for Chapter 11 reorganization in the near term.
However, that’s not what’s in focus right now. This coming week could be an important one for Mallinckrodt. The company’s kidney failure drug will be in the spotlight. The U.S. FDA previously accepted for review the company’s New Drug Application for terlipressin. This is Mallinckrodt’s investigational agent being evaluated for the treatment of hepatorenal syndrome type 1 (HRS-1). This is a life-threatening syndrome involving acute kidney failure in people with cirrhosis.
Terlipressin has been approved in countries outside of the U.S. and Canada. It’s currently being investigated in the U.S. and Canada for HRS-1. The FDA assigned a Prescription Drug User Fee Act (PDUFA) target date of September 12, 2020. So, heading into the short week, this could be an important date to note if MNK stock is on your list right now.Biotech Penny Stocks To Buy [or avoid] #2: Trevena Inc.
Trevena Inc. (TRVN Stock Report) has also been a volatile biotech penny stock to watch this year. In general, TRVN stock has experienced an explosive year thus far. Despite the big drop in August, Trevena’s stock price is still up more than 260% from its April lows of $0.46.
In June, we first picked up on Trevena after it began collaborating with Imperial College London to evaluate the potential of TRV027. This is the company’s potential treatment for acute lung injury contributing to acute respiratory distress syndrome (ARDS) in COVID-19 patients. But this wasn’t the only driving force behind the move in TRVN stock.
Heading into the first week of August, Trevena’s IV Olinvyk (oliceridine) was approved by the US FDA for intravenous use in hospitals and other controlled clinical settings. Amid all of its major headlines, Trevena also raised capital. That seemed to be the main trigger of its recent consolidation.
So, why could attention refocus on the company this month? Aside from a late afternoon surge on Friday, Trevena is set to present at a number of industry conferences this month. Over the next few weeks, the company is set to present at H.C. Wainwright’s 22nd Annual Global Investment Conference, Cantor Fitzgerald’s Virtual Global Healthcare Conference, and Oppenheimer’s Fall Healthcare Life Sciences & MedTech Summit. Will these presentations leave a lasting impact on TRVN stock during the final weeks of Q3?
Dynavax Technologies Corporation (DVAX Stock Report) was another one of the companies that we discussed earlier this year. Back in late-May, DVAX stock hit the watch list after a FORM4 Filing indicated an insider trade. Company Director Andrew Hack purchased 1 million shares of DVAX stock at a price of $5. From that time on, DVAX stock was in rally mode. It didn’t stall out until reaching a 52-week high of $12.44 in late-July.
While that was a great move, shares have since been sliding consistently. Last week, Friday, the penny stock hit a low of $4.52. The initial slide was triggered after the company reported its last round of earnings. Of note, Dynavax Q2 HBV vaccine sales plummeted 68% and what helped compound to big blow to the stock was another large financing deal for $50 million.
Is there a light at the end of the tunnel for DVAX? Much of the recent focus as been on the company’s COVID treatment. In fact, the company received a $3.4 million grant to boost its production capacity of its CpG 1018 to support COVID-19 response efforts. Phase 1 results from two COVID-19 adjuvanted vaccine collaborations anticipated by this month and next month. The company is also set to present at the same H.C. Wainwright conference as Trevena. Considering all of this, do you think DVAX is on a list of penny stocks to buy or avoid right now?Biotech Penny Stocks To Buy [or avoid] #4: AquaBounty Technologies, Inc.
AquaBounty Technologies, Inc. (AQB Stock Report) is a bit of a different biotech penny stock to watch. While shares had dropped considerably from their highs earlier this summer, the recent 4-week trend has been much more bullish than anything. AquaBounty is engaged in the field of land-based aquaculture. The company’s objective is to ensure the availability of high-quality seafood to meet global consumer demand. Essentially, AquaBounty genetically modifies fish.
During the month of August, there was a series of insider buying activity. AquaBounty also reported strong progress in its recent quarterly results. Sylvia Wulf, Chief Executive Officer of AquaBounty, stated, “The highlight of the second quarter was the announcement of our first harvest of conventional Atlantic salmon at our Indiana farm, an important milestone as we refine harvest systems and processes ahead of our expected initial harvest of AquAdvantage salmon in the fourth quarter this year in Indiana, followed by the anticipated first harvest of AquAdvantage salmon at our Canada-based, Prince Edward Island Farm in the first quarter of 2021.”
The company also said that it’s on schedule to select its planned 10,000 metric ton farm’s location this quarter. Furthermore, construction is anticipated to begin in early 2021. With considerable insider ownership and money raised from recent financing activities, it will be interesting to see how AquaBounty aims to capitalize on this momentum in September.