In this article, we discuss the 10 biotech penny stocks to buy according to Reddit. If you want to skip our detailed analysis of these stocks, go directly to the 5 Biotech Penny Stocks to Buy According to Reddit.
Innovation and advancements in science and technology over the past few decades have transformed the field of medicine. This pace of change is more apparent in the biotechnology industry than any other market sector. According to a report by Grand View Research, the global biotech market is expected to grow at a compound annual growth rate of over 15% in the next seven years to reach a value of $2.4 trillion in 2028. Retail investors on internet platforms like Reddit have been pouring into biotech stocks in hopes of cashing in on this growth.
Some of the biotech stocks presently popular on the platform include Pfizer Inc. (NYSE: PFE), Eli Lilly and Company (NYSE: LLY), AbbVie Inc. (NYSE: ABBV), Bristol-Myers Squibb Company (NYSE: BMY), Abbott Laboratories (NYSE: ABT), and GlaxoSmithKline plc (NYSE: GSK), among others. However, the advent of the pandemic has pushed the valuations of these firms to record highs, pushing them out of reach of retail investors who are piling into biotech penny stocks that offer the same type of growth at lower prices.
Investors who want exposure to biotech firms should keep in mind industry growth catalysts like the increase in digital diagnosis, the production of personalized medicine, and an increase in collaborations between different drug firms. According to a report by the Centre of Medicare and Medicaid Services, the national health expenditure in the US had already reached $3.8 trillion by 2019, before the pandemic. This figure has climbed rapidly in the past year-and-a-half and looks set to increase further as more variants of the virus spring up.
The pandemic has thrown the world into disarray. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context in mind, here is our list of the 10 biotech penny stocks to buy according to Reddit. These were ranked keeping in mind the recent results from the trials and studies of drugs under development, the hype on Reddit, analyst ratings, hedge fund sentiment, and basic business fundamentals.
Number of Hedge Fund Holders: 2 Price as of August 6, 2021: $0.85 per share
Histogen Inc. (NASDAQ: HSTO) is a California-based clinical stage therapeutics firm. It is placed tenth on our list of 10 biotech penny stocks to buy according to Reddit. On June 22, the share price of the company jumped more than 15% after it announced results from a study into a drug being developed by the firm for COVID-19 patients. The study measured the effects of the drug, named emricasan, with regards to safety, tolerability, and preliminary efficacy. The results were overwhelmingly positive.
On June 4, investment advisory Canaccord initiated coverage of Histogen Inc. (NASDAQ: HSTO) stock with a Buy rating but lowered the price target to $4 from $5, noting the price change reflected disappointing results from a leading drug program.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Histogen Inc. (NASDAQ: HSTO) with 73,479 shares worth more than $95,000.
Just like Pfizer Inc. (NYSE: PFE), Eli Lilly and Company (NYSE: LLY), AbbVie Inc. (NYSE: ABBV), Bristol-Myers Squibb Company (NYSE: BMY), Abbott Laboratories (NYSE: ABT), and GlaxoSmithKline plc (NYSE: GSK), Histogen Inc. (NASDAQ: HSTO) is one of the best stocks in the health sector.
Number of Hedge Fund Holders: 2 Price as of August 6, 2021: $2.20 per share
Vascular Biogenics Ltd. (NASDAQ: VBLT) is a biotechnology company that focuses on the development and marketing of drugs for treatment of cancer. The firm is based in Israel and is ranked ninth on our list of 10 biotech penny stocks to buy according to Reddit. In earnings results for the first quarter, posted on May 11, the firm reported earnings per share of -$0.12, beating market expectations by $0.01. On June 3, the stock soared 8% on the back of positive reaction to an amendment to a Phase 3 study into a cancer drug.
On May 18, investment advisory Guggenheim assumed coverage of Vascular Biogenics Ltd. (NASDAQ: VBLT) stock with a Buy rating and a price target of $7. Etzer Darout, an analyst at the firm, issued the ratings update.
At the end of the first quarter of 2021, 2 hedge funds in the database of Insider Monkey held stakes worth $1.7 million in Eton Pharmaceuticals, Inc. (NASDAQ: ETON), the same as in the previous quarter worth $1 million.
In addition to Pfizer Inc. (NYSE: PFE), Eli Lilly and Company (NYSE: LLY), AbbVie Inc. (NYSE: ABBV), Bristol-Myers Squibb Company (NYSE: BMY), Abbott Laboratories (NYSE: ABT), and GlaxoSmithKline plc (NYSE: GSK), Eton Pharmaceuticals, Inc. (NASDAQ: ETON) is one of the best stocks in the health sector.
Number of Hedge Fund Holders: 2 Price as of August 6, 2021: $4.94 per share
Entera Bio Ltd. (NASDAQ: ENTX) is placed eighth on our list of 10 biotech penny stocks to buy according to Reddit. The company is headquartered in Israel and focuses on the development of drugs for unmet medical needs. On June 23, the share price of the firm jumped more than 40% after the firm announced positive topline data from a midstage trial of EB613, a drug being developed by the firm for the treatment of osteoporosis. Earlier in June, the company had revealed that it had been granted a European patent for oral PTH formulations.
On June 24, investment advisory B Riley reiterated a Buy rating on Entera Bio Ltd. (NASDAQ: ENTX) stock and raised the price target to $14 from $9, noting the shares had upside potential ahead of a regulatory meeting on drugs.
Out of the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm Knoll Capital Management is a leading shareholder in Entera Bio Ltd. (NASDAQ: ENTX) with 1.7 million shares worth more than $6.8 million.
Alongside Pfizer Inc. (NYSE: PFE), Eli Lilly and Company (NYSE: LLY), AbbVie Inc. (NYSE: ABBV), Bristol-Myers Squibb Company (NYSE: BMY), Abbott Laboratories (NYSE: ABT), and GlaxoSmithKline plc (NYSE: GSK), Entera Bio Ltd. (NASDAQ: ENTX) is one of the best stocks in the health sector.
Diffusion Pharmaceuticals Inc. (NASDAQ: DFFN) is ranked seventh on our list of 10 biotech penny stocks to buy according to Reddit. The firm is based in Virginia and operates as a biopharmaceutical company focusing on the development of novel therapies that enhance the ability of the body to deliver oxygen. On May 10, the stock jumped more than 10% after the firm announced positive results from a study evaluating the effects of trans sodium crocetinate in patients with COIVD-19.
On June 30, the share price of Diffusion Pharmaceuticals Inc. (NASDAQ: DFFN) jumped more than 12% after the company announced positive topline results from a trial of a drug being developed by the firm to measure effects of peripheral tissue oxygenation in volunteers.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Diffusion Pharmaceuticals Inc. (NASDAQ: DFFN) with 1.8 million shares worth more than $1.6 million.
Pfizer Inc. (NYSE: PFE), Eli Lilly and Company (NYSE: LLY), AbbVie Inc. (NYSE: ABBV), Bristol-Myers Squibb Company (NYSE: BMY), Abbott Laboratories (NYSE: ABT), and GlaxoSmithKline plc (NYSE: GSK) are some of the best stocks in the health sector, just like Diffusion Pharmaceuticals Inc. (NASDAQ: DFFN).
Number of Hedge Fund Holders: 3 Price as of August 6, 2021: $1.58 per share
Kintara Therapeutics, Inc. (NASDAQ: KTRA) is a biotechnology company that concentrates on development of therapies for unmet medical needs. It is headquartered in California and is placed sixth on our list of 10 biotech penny stocks to buy according to Reddit. On May 26, the share price of the company soared more than 26% after it released a site activation update for a mid stage trial into a drug for brain cancer. The firm revealed that a treatment arm in the registration for the trial had been activated in 15 sites.
On July 1, the share price of Kintara Therapeutics, Inc. (NASDAQ: KTRA) soared close to 40% after it released positive results from a study into the VAL-083, a drug being developed by the firm for treatment of patients with an aggressive form of brain cancer.
Out of the hedge funds being tracked by Insider Monkey, Massachusetts-based investment firm Nantahala Capital Management is a leading shareholder in Kintara Therapeutics, Inc. (NASDAQ: KTRA) with 902,677 shares worth more than $1.5 million.
Pfizer Inc. (NYSE: PFE), Eli Lilly and Company (NYSE: LLY), AbbVie Inc. (NYSE: ABBV), Bristol-Myers Squibb Company (NYSE: BMY), Abbott Laboratories (NYSE: ABT), and GlaxoSmithKline plc (NYSE: GSK) are some of the best stocks in the health sector, in addition to Kintara Therapeutics, Inc. (NASDAQ: KTRA).
