Biotech penny stocks have become some of the most popular stocks to watch throughout the Covid pandemic. And while the obvious explanation for this is the relationship between biotech and Covid, there are some less obvious factors to consider.
For one, the pandemic has helped to emphasize a large range of biotech companies that are not working on a Covid treatment. This is because investors have continued to focus on companies that have a large pipeline of promising assets rather than ones only working on a vaccine or treatment.
The next thing to consider is that there are a lot of biotech penny stocks working on either treatments or vaccines for Covid-19. These companies can be more volatile than others, but the potential can also be quite high.
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Now, when looking for a biotech penny stock to buy, there are a few things to consider. First and foremost is, what does its pipeline look like? This includes knowing how many drugs it has in development, and where those drugs are in the various stages of approval.
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Next, how is its financial situation? Has it engaged in any fundraising rounds or does it have a large balance of cash on hand? This information can help to identify potential long-term business opportunities and whether or not it can fund ongoing/future trials and research.
These are all equally important aspects to consider for all prospective biotech investors. So with this in mind, are these the top penny stocks to buy for May 2021?
- Iterum Therapeutics Plc. (NASDAQ: ITRM)
- Onconova Therapeutics Inc. (NASDAQ: ONTX)
- Asensus Surgical Inc. (NYSE: ASXC)
- Zomedica Corp. (NYSE: ZOM)
1. Iterum Therapeutics Plc. (NASDAQ: ITRM)
Iterum is a clinical-stage pharmaceutical company working on the production of anti-infectives. These compounds are used for a variety of drug-resistant pathogens around the world. Its flagship compound known as sulopenem is a novel anti-infective that is currently in a Phase 3 trial to see its efficacy in treating antibiotic-resistant anaerobic infections.
Iterum states that it has received QIPD or Qualified Infectious Disease Product and Fast Track Designations for both the oral and intravenous formulations of sulopenem in seven different indications. Last month, Iterum announced its fourth quarter and full-year 2020 results.
Corey Fishman, CEO of the company stated that “Iterum has made excellent progress in the last few months and we look forward to continuing that momentum throughout 2021. In the fourth quarter of 2020, we submitted a New Drug Application (NDA) for oral sulopenem for the treatment of uncomplicated urinary tract infections in patients with a quinolone non-susceptible organism, which is currently under review by the FDA with a July 25th, 2021 Prescription Drug User Fee Act (PDUFA) goal date.”
Only a month before this, the company announced the increase of its share offering to 40 million shares, bringing in aggregate net proceeds of around $42.1 million. This should help to fund the rest of the sulopenem trial as well as the commercial launch of this compound. Considering its role in the biotech industry, is ITRM stock worth watching?
2. Onconova Therapeutics Inc. (NASDAQ: ONTX)
Onconova is another pure-play biotech penny stock working on clinical-stage pharmaceuticals. Its focus is on treatments for cancer, including targeted anti-cancer therapeutics that disrupt specific cellular pathways. This includes its proprietary multi-kinase inhibitor known as ON-123300. This compound is beginning a dose-escalation and expansion Phase 1 trial in the U.S. The data from this study should be coming in the second quarter of this year.
Additionally, a similar trial is currently ongoing in China. Another interesting part of its pipeline is the compound rigosertib. This is in preclinical trials right now for its efficacy in treating Covid-19.
On April 22nd, the company announced that its first patient was dosed in an investigator-initiated Phase 2 study of rigosertib in recessive dystrophic epidermolysis bullosa-associated squamous cell carcinoma (RDEB).
Steven Fruchtman, M.D., CEO of Onconova, stated that “we are pleased with the advancement of our investigator-initiated programs with rigosertib, and to provide rigosertib in support of this important Phase 2 investigator-sponsored study…We hope rigosertib can prove beneficial to this rare patient population with a tremendous unmet medical need.”
This comes only a few weeks after the company announced full enrollment in the second cohort of its China-based study of ON-123300 with HanX Biopharmaceuticals. In this trial, the goal is to see ON-123300’s efficacy in the treatment of metastatic breast cancer and other advanced refractory cancers.
Considering its exciting pipeline, it looks like Onconova could be an interesting penny stock to watch. Additionally, shares of ONTX stock have jumped by around 47% YTD, including a double-digit gain on April 22nd. Whether this puts it on your watchlist is up to you.
3. Asensus Surgical Inc. (NYSE: ASXC)
Asensus Surgical is penny stock that we’ve covered quite a few times in the past few months. The reason being, its solid pipeline of potentially valuable assets. The company states that it is creating “a new standard of surgery for increased control, less variability and consistently superior outcomes.”
Its main product aims to use AI to improve the outcomes of both common and more intensive surgical procedures. The majority of its market is based on providing the tools to conduct elective surgeries more safely and effectively.
When the pandemic first began, many individuals decided to forgo elective surgeries for the time being. However, as the months passed and cases dropped, these surgeries began to occur at almost pre-covid levels.
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Because of this, some investors believe that Asensus and its flagship Performance-Guided Surgery products could see a major increase in demand in the coming months or years. This includes its Senhance Surgical System, which recently received an expanded 510(k) clearance for use in general surgery applications.
Additionally, its Intelligent Surgical Unit, or ISU, recently was awarded a CE Mark in Europe. In the latest fourth-quarter result, the CEO of the company gave a statement regarding the company’s current and future operations.
“We are very pleased with the momentum we generated during 2020 and particularly during the fourth quarter. This momentum continued into the early part of 2021 where we have already accomplished a number of significant milestones, including the bolstering of our balance sheet, the rebranding of the organization, and the introduction of our vision for Performance-Guided Surgery.”
CEO of Asensus Surgical Inc., Anthony Fernando
With all of this exciting news in mind, is ASXC a penny stock to watch or not?
4. Zomedica Corp. (NYSE: ZOM)
Shares of Zomedica continued rebounding on April 22nd. This marked the second day in a row that the medical device stock headed back toward the $1 mark. The company’s main focus is on commercial sales of its recently launched diagnostic device, TRUFORMA.
The platform offers total control over the testing process for animals. It offers highly sensitive and specific immunoassays that allow veterinarians to make clinical decisions “faster and begin treating patients sooner.”
Last quarter was the big update that traders have waited for since 2020: the commercial launch of TRUFORMA. Now Zomedica is looking to expand its salesforce and go direct to customers.
Earlier in the month, the company announced that it expanded its sales organization. Brük Herbst, Chief Commercial Officer of Zomedica, explained that “A direct sales force will significantly improve our ability to serve our customers and to sell our products in the veterinary market in the longer term.”
If you’re unfamiliar with the backstory of Zomedica over the last few months, it has included everything from Reddit traders to Carol Baskin of the show Tiger King. Speculation on the launch of commercial sales has helped drive ZOM stock from under $0.10 to over $2.90. But since February, shares have been in a constant decline as traders await the results of advanced sales efforts.
Thanks to recent news on expansionary plans, the market has seen an uptick in momentum. Furthermore, over the last 2 sessions, ZOM stock has jumped by as much as 32% so far. Will it still be one of the penny stocks under $1 this time next week?