In this article, we will look at the 14 Best Biotech Penny Stocks to Buy Right Now.
Is The Biotech Sector Ready for a Breakout?
On July 8, Mizuho’s healthcare strategist Jared Holz appeared on CNBC’s ‘Closing Bell Overtime’ to talk about whether it is time for the biotech sector to undergo a breakout.
He acknowledged that biotech has been a “super tough sector” either way, as there are hundreds of publicly traded stocks that do not add up to anything in aggregate. He added that since there are a lot of negatives and positives, it is tough to make an industry call.
However, Holz stated that he believes the sector is trading “a little bit better,” as it stopped going down every single day after “indiscriminately trading horribly for so long.”
READ ALSO: 10 Best Strong Buy Stocks to Buy Under $10 and 10 Most Undervalued Blue Chip Stocks to Buy According to Hedge Funds.
He reasoned that we are now at a point where all the negatives, such as pricing pressures and competition in the amount of assets in the publicly traded arena, are well understood and well-digested, marking the time for a move higher. It might not be a massive move, but it would certainly be a less negative one, according to Holz.
With these trends in view, let’s look at the best biotech penny stocks to buy now.
A laboratory filled with beakers and flasks, signifying the biotechnology industry.
Our Methodology
We used Finviz to make a list of biotech stocks with a stock price under $5 and selected the top 14 with the highest number of hedge fund holders as of Q1 2025. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund holders.
Note: All data was sourced on July 30.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
14 Best Biotech Penny Stocks to Buy Right Now
14. Sana Biotechnology, Inc. (NASDAQ:SANA)
Stock Price: $4.36
Number of Hedge Fund Holders: 13
Sana Biotechnology, Inc. (NASDAQ:SANA) is one of the best biotech penny stocks to buy right now. Citi analyst Samantha Semenkow maintained a bullish stance on Sana Biotechnology, Inc. (NASDAQ:SANA), giving it a Buy rating on July 2 with a $15 price target.
The analyst based the rating on Sana Biotechnology, Inc.’s (NASDAQ:SANA) potential in addressing notable market opportunities.
Semenkow stated that the company’s Type 1 Diabetes (T1D) program has exhibited considerable proof-of-concept results, with updated six-month data showing durable c-peptide production and successful graft survival without the need for immunosuppression.
According to the analyst, this data consistency bolsters confidence in Sana Biotechnology, Inc.’s (NASDAQ:SANA) approach and paints a positive picture for its T1D asset, SC451, anticipated to make progress towards an IND as early as 2026.
The same day, Morgan Stanley analyst Maxwell Skor also assumed coverage of Sana Biotechnology, Inc. (NASDAQ:SANA) with an Overweight rating and $12 price target. The analyst expects an investigational new drug filing as early as next year for its proprietary HIP-modified, islet stem-cell derived T1D therapy, SC451.
Sana Biotechnology (NASDAQ:SANA) is a biotechnology company that specializes in using engineered cells as medicines. It develops cell engineering programs that transform treatment across several therapeutic areas with treatment gaps, including diabetes, oncology, the central nervous system, and B-cell-mediated autoimmune disorders.
13. Atai Life Sciences (NASDAQ:ATAI)
Stock Price: $3.35
Number of Hedge Fund Holders: 14
Atai Life Sciences (NASDAQ:ATAI) is one of the best biotech penny stocks to buy right now. On July 30, H.C. Wainwright analyst Patrick Trucchio raised the firm’s price target on Atai Life Sciences (NASDAQ:ATAI) to $15 from $10 while keeping a Buy rating on the shares.
The firm told investors that it is bullish on Atai Life Sciences (NASDAQ:ATAI) despite the Phase 2b trial, which evaluated indiabine in patients with cognitive impairment associated with schizophrenia, missing the primary endpoint.
The analyst added in a research note that management reiterated Atai Life Sciences’ (NASDAQ:ATAI) focus on its wholly-owned psychedelics pipeline in a follow-up call. This includes BPL-003, which has continued to surpass expectations.
The firm thus cited Atai Life Sciences’ (NASDAQ:ATAI) focus on its “most promising near-term asset” for the target upgrade.
Headquartered in Germany, Atai Life Sciences (NASDAQ:ATAI) is a clinical-stage biopharmaceutical company focused on treating mental health disorders.
