In this article, we discuss the 12 best biotech penny stocks to invest in. If you want to skip our detailed analysis of these stocks, go directly to 5 Best Biotech Penny Stocks to Invest In.
The past few years have been a topsy-turvy ride for the biotech sector. There was a massive increase in investments in biotech firms as vaccine development for the COVID-19 pandemic became a primary concern around the globe. Following the success of these vaccines, there was a normalization period for the biotech market as macro factors, combined with waning interest in coronavirus vaccines, as well as fewer drug approvals by the drug authorities hit revenues. In 2023, the sector rebounded, jumping back to pre-pandemic levels of growth.
As the market dynamics improve, investments are surging, IPOs picking up pace again, and companies continue to innovate, there is increased optimism around the biotech world in 2024. One indication of this optimism is the performance of biotech giants like GlaxoSmithKline plc (NYSE:GSK), Eli Lilly and Company (NYSE:LLY), and AbbVie Inc. (NYSE:ABBV) on the stock market. The shares of these firms are up 12%, 29%, and 11% year-to-date respectively. There is an uptick in shareholder activism and mergers and acquisitions activity too.
Investors eager to ride the optimism in the biotech sector this year should carefully look at the growth plans of big biotech companies that are spending billions in research and development to stay ahead of the curve. The comments of Dave Ricks, the CEO of Eli Lilly and Company (NYSE:LLY), can provide some context into this. During the fourth quarter earnings call at the beginning of February, Ricks highlighted the efforts of his company towards increasing the resilience of drug manufacturing and growing top lines through key partnerships.
“In terms of external innovation, in 2023, we continued to complement our pipeline through acquisitions and collaborations. These transactions included the acquisition of DICE Therapeutics, POINT Biopharma, Versanis Bio, Emergence Therapeutics, Mablink Biosciences, Immunitrack, as well as Sigilon Therapeutics. We announced several significant investments in manufacturing, including plans to expand capacity at the company's Research Triangle Park facility and the two manufacturing sites within the LEAP Innovation Park in Boone County, Indiana. Most recently, we announced plans to construct a new high-tech manufacturing site in Germany. This facility will further expand the company's global injectable product and device manufacturing network, including for our diabetes and obesity portfolio. Most importantly, this past year, we brought innovative new medicines to patients. In 2023, we received regulatory approvals for Zepbound, Jaypirca, Omvoh, and Ebglyss in the U.S. and in the EU, rather, and an expanded label for Verzenio, and two new indications for Jardiance.
This progress will serve as a foundation to drive top-tier revenue growth and margin expansion over time. we continue to make progress against our strategic deliverables in Q4. Revenue grew 28%, with our new products growing by over $2 billion. Since our last earnings call, we achieved several key pipeline milestones. In addition to the Zepbound and Jaypirca CLL approvals, today, we announced top-line results for the tirzepatide phase 2 SYNERGY-NASH trial, as well as the Verzenio phase 3 CYCLONE-2 trial. Dan will talk more about these updates in his update. In terms of business development, in Q4, we completed the acquisitions of Mablink Biosciences and POINT Biopharma, the latter of which expands our capacity and capability into radioligand therapies. Lastly, we announced a 15% dividend increase for the sixth consecutive year and distributed over $1 billion in dividends in the fourth quarter.”
Our Methodology
The companies that operate in the biotech sector and are priced under $5 per share, as of March 18, were selected through extensive research on Reddit and prominent finance websites. They were then ranked based on hedge fund sentiment. The analyst ratings of each stock are also discussed to provide readers with some context for their investment choices. The hedge fund sentiment around each stock was calculated using the data of around 900 hedge funds tracked by Insider Monkey in the fourth quarter of 2023. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
A laboratory technician researching a sample of cells in a biotechnology laboratory.
12. Acasti Pharma Inc. (NASDAQ:ACST)
Number of Hedge Fund Holders: 1
Acasti Pharma Inc. (NASDAQ:ACST) is a Canada-based biotechnology company founded in 2002. On February 7, investment advisory Craig-Hallum initiated coverage of Acasti Pharma Inc. (NASDAQ:ACST) stock with a Buy rating and a price target of $6.
Among the hedge funds being tracked by Insider Monkey, Texas-based investment firm ADAR1 Capital Management is a leading shareholder in Acasti Pharma Inc. (NASDAQ:ACST) with 34,532 shares worth more than $99,000.
At the end of the fourth quarter of 2023, 1 hedge fund in the database of Insider Monkey held stakes worth $100,000 in Acasti Pharma Inc. (NASDAQ:ACST).
Just like GlaxoSmithKline plc (NYSE:GSK), Eli Lilly and Company (NYSE:LLY), and AbbVie Inc. (NYSE:ABBV), Acasti Pharma Inc. (NASDAQ:ACST) is one of the best biotech penny stocks to invest in.
11. iBio, Inc. (NYSE:IBIO)
Number of Hedge Fund Holders: 2
iBio, Inc. (NYSE:IBIO) provides contract development and manufacturing services to the healthcare industry. iBio, Inc. (NYSE:IBIO) engages in the development of precision antibodies in the United States. It offers IBIO-100, a preclinical anti-fibrotic program for the treatment of systemic scleroderma and idiopathic pulmonary fibrosis, as well as the EngageTx platform, which provides an optimized CD3 T-cell engager antibody panel.
Among the hedge funds being tracked by Insider Monkey, New Jersey-based investment firm Sabby Capital is a leading shareholder in iBio, Inc. (NYSE:IBIO) with 176,748 shares worth more than $242,000.
At the end of the fourth quarter of 2023, 2 hedge funds in the database of Insider Monkey held stakes worth $277,000 in iBio, Inc. (NYSE:IBIO), compared to 1 in the preceding quarter worth $16.
10. Cyclerion Therapeutics, Inc. (NASDAQ:CYCN)
Number of Hedge Fund Holders: 2
Cyclerion Therapeutics, Inc. (NASDAQ:CYCN) is a Boston-based biopharma firm founded in 2018. Cyclerion Therapeutics, Inc. (NASDAQ:CYCN) engages in the discovery, development, and commercialization of medicines for serious central nervous system diseases. A lead product candidate is Zagociguat (CY6463), a CNS-penetrant, soluble guanylate cyclase (sGC) stimulator that is in Phase IIa trials for the treatment of mitochondrial encephalomyopathy, lactic acidosis, and stroke-like episodes, as well as Alzheimer's disease with vascular pathology; and Phase 1 trials diagnosed with schizophrenia in adults.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Slate Path Capital is a leading shareholder in Cyclerion Therapeutics, Inc. (NASDAQ:CYCN) with 357,880 shares worth more than $1.1 million.
At the end of the fourth quarter of 2023, 3 hedge funds in the database of Insider Monkey held stakes worth $2.31 million in Cyclerion Therapeutics, Inc. (NASDAQ:CYCN), the same as in the preceding quarter worth $2.30 million.
9. Entera Bio Ltd. (NASDAQ:ENTX)
Number of Hedge Fund Holders: 3
Entera Bio Ltd. (NASDAQ:ENTX) is a biopharma firm that concentrates on the development of orally-delivered therapeutics. In mid-December, investment advisory HC Wainwright maintained a Buy rating on Entera Bio Ltd. (NASDAQ:ENTX) stock with a price target of $10.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Knoll Capital Management is a leading shareholder in Entera Bio Ltd. (NASDAQ:ENTX) with 3.8 million shares worth more than 2.3 million.
At the end of the fourth quarter of 2023, 3 hedge funds in the database of Insider Monkey held stakes worth $2.3 million in Entera Bio Ltd. (NASDAQ:ENTX), compared to 4 in the preceding quarter worth $1.8 million.
8. Agile Therapeutics, Inc. (NASDAQ:AGRX)
Number of Hedge Fund Holders: 3
Agile Therapeutics, Inc. (NASDAQ:AGRX) operates as a women’s healthcare firm. Agile Therapeutics, Inc. (NASDAQ:AGRX) researches, develops, and commercializes prescription contraceptive products for women in the United States. A lead product for the firm is Twirla, also known as AG200-15, a once-weekly prescription combination hormonal contraceptive patch.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Armistice Capital is a leading shareholder in Agile Therapeutics, Inc. (NASDAQ:AGRX) with 108,000 shares worth more than $210,000.
At the end of the fourth quarter of 2023, 3 hedge funds in the database of Insider Monkey held stakes worth $363,000 in EAgile Therapeutics, Inc. (NASDAQ:AGRX), up from 2 in the preceding quarter worth $266,000.
7. ReWalk Robotics Ltd. (NASDAQ:LFWD)
Number of Hedge Fund Holders: 4
ReWalk Robotics Ltd. (NASDAQ:LFWD) is a medical device company that markets robotic exoskeletons for individuals with mobility impairments. On February 28, investment advisory HC Wainwright maintained a Buy rating on ReWalk Robotics Ltd. (NASDAQ:LFWD) stock with a price target of $21.
Among the hedge funds being tracked by Insider Monkey, Nevada-based investment firm Kent Lake Capital is a leading shareholder in ReWalk Robotics Ltd. (NASDAQ:LFWD) with 683,447 shares worth more than $531,000.
At the end of the fourth quarter of 2023, 4 hedge funds in the database of Insider Monkey held stakes worth $905,000 in ReWalk Robotics Ltd. (NASDAQ:LFWD), up from 2 in the preceding quarter worth $11,000.
6. Asensus Surgical, Inc. (NYSE:ASXC)
Number of Hedge Fund Holders: 4
Asensus Surgical, Inc. (NYSE:ASXC) is a medical device company that markets robotics solutions for enhancement of minimal invasive surgery. In mid-November, investment advisory HC Wainwright maintained a Buy rating on Asensus Surgical, Inc. (NYSE:ASXC) stock with a price target of $2.
At the end of the fourth quarter of 2023, 3 hedge funds in the database of Insider Monkey held stakes worth $740,000 in Asensus Surgical, Inc. (NYSE:ASXC), the same as in the previous quarter worth $877,000.
Along with GlaxoSmithKline plc (NYSE:GSK), Eli Lilly and Company (NYSE:LLY), and AbbVie Inc. (NYSE:ABBV), Asensus Surgical, Inc. (NYSE:ASXC) is one of the best biotech penny stocks to invest in.
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Disclosure. None. 12 Best Biotech Penny Stocks to Invest In is originally published on Insider Monkey.
