With only six days behind us in April so far, biotech penny stocks continue to lead the charge. Since they’re so cheap (stocks under $5, by definition), traders are on the hunt for the next breakout name. The obvious reason for this comes from the Covid-19 pandemic, which has put a massive focus on biotech companies of all types. While it may seem easy to choose from the hundreds of biotech stocks under $5, there are a few things to keep in mind before making a watchlist.
The most obvious is what does the company’s pipeline look like? Does it have drugs currently in the commercialization stage? Is it engaged in several clinical trials right now? What is its role in fighting Covid, if any?
These are all important questions to identify where value could be amongst biotech penny stocks. The second thing to keep in mind, and one that applies to all investments, is its financials. Does it have massive debt on the books? Is there enough capital to support ongoing trials? How diluted is the market from fundraising?Penny Stocks to Buy [or avoid] In April:
These questions can be answered by looking at a biotech company’s filings and press releases. While this is not an all-encompassing list by any means, some of these biotech penny stocks have caught the attention of traders this month.
- Celsion Corp. (NASDAQ: CLSN)
- Titan Medical Inc. (NASDAQ: TMDI)
- Lipocine Inc. (NASDAQ: LPCN)
- Obalon Therapeutics Inc. (NASDAQ: OBLN)
- Astrotech Corporation (NASDAQ: ASTC)
Celsion Corp. is an interesting clinical-stage biotech company with a large pipeline, not compounds. This includes those used in cancer treatment, immunotherapies, and DNA-based therapies. Also, Celsion has been working on developing nucleic acid vaccines focused on SARS-CoV-2. Within its pipeline, Celsion produces GEN-1, which is a DNA-based treatment for ovarian cancer.
It also produces ThermoDox, which is under investigation for its ability to treat several types of cancer. On April 5th, Celsion announced the closing of a $15 million registered direct offering. The offering will consist of over 11.53 million shares sold at $1.30 per share.
Celsion will use the proceeds to further its R&D activities, among other things. In a recent update, Celsion highlighted that its immunotherapy, GEN-1, showed a 41% improvement in R0 Resection Rates among ovarian cancer patients. This demonstrated that 41% of patients saw no gross or microscopic tumor in the primary tumor bed.
The announcement of this data is highly encouraging because it shows commercialization of GEN-1 could be closer than previously imagined. So with its strong balance sheet and a large pipeline of promising compounds, CLSN could be worth watching.Titan Medical Inc. (NASDAQ: TMDI)
Titan Medical is another biotech penny stock, but one that works in a different market area. TMDI is a medical tech provider utilizing robotics to help make breakthroughs in the surgical industry. This includes the Enos System, which offers both 2D/3D vision systems and a range of multi-articulating surgical instruments. All of this is encompassed in a state-of-the-art, ergonomically designed workstation.
In addition to this, Titan is licensing this technology out. David McNally, CEO of Titan, explained that “the achievements to date position Titan for success in attaining our vision for robotic-assisted surgery that may allow patients less trauma, shorter hospitalization time, less scarring, faster recovery times, and reduced post-operative pain. With a strong cash position and expert in-house technical talent, the advanced development of the Enos surgical system is at full intensity.”
The company states that the U.S. surgical robotics market could reach $18 billion in value within the next several years. It argues that there are six million procedures each year that could utilize its Enos System. Right now, there is a major lack of robotic surgery providers, which could obviously benefit Titan.
Also, its system allows for single-incision surgery, which can vastly minimize risks associated with common types of surgeries. This could help reduce infection, which is a major plus considering the pandemic. As a relatively unique biotech penny stock, TMDI could be worth watching for some.Lipocine Inc. (NASDAQ: LPCN)
Lipcocine Inc. is a clinical-stage biopharmaceutical company with a focus on the treatment of both endocrine and metabolic disorders. It utilizes its proprietary drug delivery technology to produce a large pipeline of compounds. This includes TLANDO, LPCN-1144, TLANDO XR, LPCN-1148, and LPCN-1107. Its flagship compound right now is TLANDO, which is an oral prodrug of testosterone that could be used in those with a testosterone deficiency.
Lipocine has already received tentative approval from the FDA for endogenous testosterone deficiency or hypogonadism. Additionally, its LPCN-1107 compound has been granted orphan drug designation for its potential to prevent recurrent preterm birth in patients. In mid-March, Lipocine announced its full-year 2020 financial results.
In the results, CEO Dr. Mahesh Patel stated that “Lipocine had a number of important accomplishments in 2020, most notably the U.S. FDA decision to grant tentative approval to TLANDO, the Company’s oral testosterone product for testosterone replacement therapy in adult males with hypogonadism. We also made excellent progress advancing LPCN 1144 for the treatment of non-cirrhotic non-alcoholic steatohepatitis (NASH).”
Financially, Lipocine reported a net loss of around $21 million or $0.38 per share. But, it also ended the year with almost $20 million in unrestricted cash and cash equivalents. This was also before a recent $28.7 million public offering, which was completed in January 2021.
Among analysts, the consensus is a Buy with the most recent rating coming from H.C. Wainwright. The firm also set a $3 price target on the stock.Obalon Therapeutics Inc. (NASDAQ: OBLN)
Obalon Therapeutics is another medical tech company with interesting prospects. It focused on the weight loss market, where it produces and commercializes novel technologies. This includes its FDA-approved swallowable, gas-filled balloon system that sits in the GI tract to treat obesity. Similar to Lipocine, Obalon recently reported its full-year 2020 financial results as well as results for Q4 2020.
On top of signing a merger agreement with ReShape Lifesciences Inc. Obalon managed to greatly reduce its net loss. In Q4 2020, OBLN brought in a net loss of $0.17 or $1.3 million. This is much less than the $0.64 or $4.9 million loss it brought in during the fourth quarter of 2019.
[Read More] 3 Biotech Penny Stocks To Watch In April 2021
The real news from this announcement is Obalon’s merger with ReShape. When this was announced last year, shares of OBLN stock shot up by an astounding 500%. Bart Bandy, CEO of ReShape, stated that “we are excited with this opportunity to add Obalon’s FDA approved Balloon System to ReShape’s line of minimally invasive weight-loss solutions while also expanding our market reach.”
If the pair can successfully commercialize this technology, it could be a major financial opportunity for both companies involved. While it may take some time, OBLN could be worth watching.Astrotech Corporation (NASDAQ: ASTC)
Despite falling like a rock in February, Astrotech has done a good job recovering in March and, now, April. Shares of ASTC stock have now bounced back more than 50% from their March 5th low. This comes at a point where the company has begun scaling its operation.
Astrotech’s Astrotech Technologies, Inc. subsidiary recently engaged Sanmina to begin manufacturing its mass spectrometry products. The company’s 1st Detect will have the TRACER 1000 manufactured by Sanmina in addition to AgLAB’s AgLAB-1000 and BreathTech’s BreathTest-1000 once officially released.
On top of this, Astrotech came into the spotlight this week thanks to its latest 8-K filing. In the filing, the company highlighted its BreathTech subsidiary. Specifically, BreathTech signed an Investigator-Initiated Study Agreement with the Cleveland Clinic Foundation. The Clinic will use BreathTech’s BreathTest-1000 to compare Covid-positive and Covid-negative patients and analyze different compounds from their breath to see if there’s any correlation.
Obviously, with any virus-related news, attention tends to focus on specific companies issuing the updates. In this case, a formal press release wasn’t sent out as far as I can see. But the information is out there in the company’s April 6th filing.