The pandemic has shined a large spotlight on biotech penny stocks over the past twelve months. Every time a company announced a new treatment or vaccine for Covid, traders quickly jumped to buy the trend. As a result, many breakout biotech penny stocks have gained interest from both institutional and retail traders. They continue searching for what’s next.
The focus has shifted from Covid-related biotech stocks to the general biotech industry in the past few months. There are hundreds of penny stocks to choose from, and this shift has helped to flow billions of dollars of capital into biotech stocks of all kinds.
With this, many have embarked on multi-million dollar financing deals. This can bring about certain risks as well. In new financing deals, dilution can play a risk as discounted shares could hit the market.Biotech Penny Stocks to Watch Right now
Even in light of risks like these, the core focus for traders is on the potential of the companies and their pipelines. The time it takes to develop a commercial-ready treatment isn’t a quick process and usually involves numerous phase trials & the data that comes with it. With each new update comes a new potential catalyst for biotech penny stocks. Here are a few that have piqued some interest in 2021.
- Fortress Biotech Inc. (NASDAQ: FBIO)
- Predictive Oncology Inc. (NASDAQ: POAI)
- Chembio Diagnostics Inc. (NASDAQ: CEMI)
Fortress Biotech Inc. is often considered one of the more diverse biotech penny stocks on this list. The company founded several other publicly traded biotechs that have grown in popularity. H.C. Wainwright confirmed its Buy rating for FBIO and added a $10 price target for it as well. This represents a forecast of over 130% from where it stood on April 1st. In addition to this, analysts at Dawson James put a price target of $15 on FBIO.
Both of these are lofty targets. Regardless, Fortress has been advancing at a steady and consistent rate. To understand the company, investors should consider the companies that it has a foundational hand in. These include Checkpoint Therapeutics (NASDAQ: CKPT) and Mustang Bio (NASDAQ: MBIO), among others.
Both of these are making extensive progress in their respective fields. Only a day ago, FBIO announced its 2020 financial results. Lindsay Rosenwald, M.D., the CEO of Fortress, stated that “we are delighted with our continued progress, and achievement of significant milestones throughout 2020 and in recent months. Notably, our partner company, Cyprium Therapeutics and Sentynl Therapeutics, a wholly-owned subsidiary of the Zydus Group, signed a Development and Asset Purchase Agreement for CUTX-101 for the treatment of Menkes disease.”
In terms of financials, the company generated net revenue of $44.5 million for the full year. Additionally, net revenue grew over 2019 by around 28%, which is quite substantial. Keeping all of this in mind, FBIO could be on the list of penny stocks to watch in April.Predictive Oncology Inc.
Predictive Oncology is one of the largest gainers of the day on April 1st, climbing roughly 21% by the end of the day. There wasn’t any company-specific news released. However, many biotech penny stocks shared similar bullish trends during the trading day. To better understand POAI, let’s take a deeper dive into its business model. Predictive Oncology is made up of three segments that have four subsidiaries within them.
The three segments are Skyline, Helomics, and Soluble Biotech. Within these, its subsidiaries are Helomics, TumorGenesis, Skyline Medical, and Soluble Biotech. These subsidiaries allow it to work in several unique markets across the biotech industry. This includes utilizing AI to treat cancer, growing media to help with cancer research, collecting and measuring blood samples, and providing formulations for vaccine bases. Around two weeks ago, Predictive Oncology announced its full-year 2020 results for the period ending on December 31st.
In the results, POAI strengthened its balance sheet with net debt and equity offerings bringing in almost $13 million in proceeds. Additionally, it completed the purchases of both Soluble Therapeutics and Quantitative Medicine.
Dr. Carl Schwarts, CFO of Predictive Oncology, stated that “we are pleased that this past year has resulted in so many significant milestones. This includes reinforcing our balance sheet through strategic equity offerings, various cost-saving measures, and significant corporate acquisitions, allowing the Company to augment its revenue-producing business segments and bringing even more experience to our Board of Directors in the form of 4 key industry experts.”
Through its mergers and acquisitions, Predictive Oncology continues to be a diversified biotech penny stock to watch right now.Chembio Diagnostics Inc.
Shares of CEMI stock shot up strong after the close last Thursday. This sizable gain comes as Chembio announced the U.S. commercial launch of its diagnostic tool to differentiate Covid-19 and the flu. Chembio previously received an Emergency Use Authorization or EUA for its in-licensed, rapid point-of-care Covid-19/Flu A&B test.
The company states that this test can be used in laboratories and can provide results in 15 minutes with no additional instrumentation. Charles Caso, VP of Sales and Marketing for Chembio, stated that “as Covid-19 coverages with the flu, it is critical for physicians to be able to quickly differentiate between these viruses at the point-of-care, which present with nearly identical symptoms, in order to take appropriate clinical actions and maximize efficient use of healthcare research.”
The company states that while Covid may digress to a less severe state, the demand for testing could remain constant in the future. Before this, Chembio spent its time working on diagnostic tools for other infectious diseases. It uses its novel DPP technology, which has a wide breadth of market applications beyond infectious diseases. Chembio also sells its products directly to hospitals and clinics worldwide to maximize its market share. As one of only a few companies working in this biotech area, CEMI could be worth watching heading into April.Should Biotech Penny Stocks Be On Your List In April?
Given the industry’s state right now, many biotech penny stocks have begun rebounding after the late-March slide. In fact, if you look at the benchmark ETFs like the Nasdaq Biotech Index ETF (NYSE: IBB) or the S&P Biotech ETF (NYSE: XBI), you should see this bounce trend. Both the XBI and IBB tested their major moving averages last week. Both of them also promptly mounted a comeback into the start of April.
As we begin to monitor the second quarter in 2021, current market conditions will obviously be considered. When it comes to sector-specific trends, like biotech, it’s also important to monitor different underlying opportunities that can arise from big advancements made by market leaders. Sympathy sentiment can play a big role, as we saw late last week. Given this, biotech could be a sector to focus on this quarter.