In this article, we will list the 5 Best Biotech Penny Stocks to Buy in 2026. Please visit 9 Best Biotech Penny Stocks to Buy in 2026 to see the extended list and the methodology behind it.

5. Absci Corporation (NASDAQ:ABSI)

Number of Hedge Fund Holders: 16

Absci Corporation (NASDAQ:ABSI) is one of the best biotech penny stocks to buy in 2026. On March 24, Absci reported Q4 and the full-year 2025 financial results, highlighting significant progress in its internal pipeline of AI-designed therapeutics. The company dosed the first three cohorts in its HEADLINE Phase 1/2a trial for ABS-201, a novel anti-PRLR antibody targeting androgenetic alopecia. Emerging data indicates the treatment is well-tolerated, and recent ex vivo studies suggest ABS-201 can stimulate hair growth by regenerating the follicle stem cell niche.

Absci expects to release preliminary safety and pharmacokinetic data in H1 2026, followed by interim proof-of-concept results in H2. The company is also diversifying the application of ABS-201 by preparing to initiate a Phase 2 trial for endometriosis in the fourth quarter of 2026. This expansion targets a significant unmet need for non-sex steroid hormone treatments in a market affecting millions of women.

Financially, Absci reported a full-year net loss of $115.2 million for 2025, with R&D expenses rising to $81.4 million as internal programs moved toward the clinic. Despite the increase in spending, the company maintains a solid balance sheet with $144.3 million in cash, cash equivalents, and marketable securities as of December 31. Management noted that this capital is sufficient to fund operations into H1 2028. Looking forward, Absci Corporation (NASDAQ:ABSI) anticipates signing at least one major drug creation partnership with a large pharmaceutical company during 2026.

Absci Corporation (NASDAQ:ABSI) develops several antibody therapeutics.

4. ​Lexicon Pharmaceuticals Inc. (NASDAQ:LXRX)

Number of Hedge Fund Holders: 20

​Lexicon Pharmaceuticals Inc. (NASDAQ:LXRX) is one of the best biotech penny stocks to buy in 2026. On March 23, Lexicon Pharmaceuticals and Novo Nordisk (NYSE:NVO) initiated a Phase 1 clinical study for LX9851, a first-in-class, oral non-incretin small molecule inhibitor targeting obesity and metabolic disorders. Discovered by Lexicon and now under exclusive worldwide development by Novo Nordisk, the drug works by inhibiting Acyl CoA Synthetase 5 (ACSL5), a key regulator of fat accumulation and energy balance.

The Phase 1 trial will evaluate the safety and pharmacokinetics of LX9851 in 96 participants and is expected to conclude in the first quarter of 2027. The initiation of this study triggered a $10 million milestone payment to Lexicon, marking the second of three near-term payments under their 2025 agreement.

Lexicon remains eligible for a third $10 million payment later this year and could receive up to $1 billion in total upfront and milestone payments, plus tiered royalties on future net sales. Lexicon CEO Mike Exton noted that the partnership uses Novo Nordisk’s scale to advance what could become a highly differentiated approach to weight management.

​Lexicon Pharmaceuticals Inc. (NASDAQ:LXRX) is a biopharmaceutical company focused on the discovery, development, and commercialization of pharmaceutical products to treat human disease.

3. Allogene Therapeutics Inc. (NASDAQ:ALLO)

Number of Hedge Fund Holders: 21

Allogene Therapeutics Inc. (NASDAQ:ALLO) is one of the best biotech penny stocks to buy in 2026. On April 16, Allogene Therapeutics closed its underwritten public offering, raising $200.4 million in aggregate gross proceeds. The offering consisted of 87.5 million shares of common stock priced at $2.00 per share, plus an additional 12.7 million shares purchased through a partial exercise of the underwriters’ option. The transaction involved a large syndicate of financial institutions, with Goldman Sachs & Co. LLC, Jefferies, and TD Cowen serving as lead joint bookrunners.

The company intends to use the net proceeds for general corporate purposes. Key areas of allocation include clinical trial expenses, ongoing R&D, G&A costs, and capital expenditures. This capital infusion provides Allogene Therapeutics Inc. (NASDAQ:ALLO) with enhanced financial flexibility to advance its pipeline of off-the-shelf chimeric antigen receptor T-cell (CAR T) therapies.

The offering was executed under an existing shelf registration statement that became effective in April 2024. Following the closing, the company’s common stock was trading down approximately 2.67%. Joint bookrunners for the deal also included Piper Sandler and William Blair, while Baird, Canaccord Genuity, and TPG Capital BD, LLC provided additional management and co-management support.

Allogene Therapeutics Inc. (NASDAQ:ALLO) is a clinical-stage biotechnology company dedicated to the development of off-the-shelf allogeneic CAR-T cell therapies for cancer and autoimmune diseases. The company’s goal is to provide a scalable, readily available cell therapy derived from healthy donors.

2. Arbutus Biopharma Corporation (NASDAQ:ABUS)

Number of Hedge Fund Holders: 27

Arbutus Biopharma Corporation (NASDAQ:ABUS) is one of the best biotech penny stocks to buy in 2026. On March 23, Arbutus Biopharma concluded 2025 in a robust financial position, reporting $91.5 million in cash, cash equivalents, and marketable securities as of December 31. The company narrowed its annual net loss to $33.5 million ($0.17 per share), compared to $69.9 million in the previous year. This improvement was driven by a disciplined restructuring that reduced R&D expenses by ~$29 million and shifted the corporate focus toward its leading clinical programs, imdusiran and AB-101.

A major corporate milestone was reached on March 3, when Arbutus and its partner Genevant Sciences entered into a $2.25 billion global settlement with Moderna. The agreement resolves long-standing patent infringement litigation regarding lipid nanoparticle/LNP delivery technology. Arbutus is set to receive 20% of a $950 million upfront payment in July, after litigation costs, with an additional $1.3 billion contingent on future appellate rulings. Due to this substantial capital influx, management is currently evaluating a return of capital to its shareholders in Q3 2026.

On the clinical front, Arbutus Biopharma Corporation (NASDAQ:ABUS) reported that two additional patients in Phase 2a trials for imdusiran achieved a functional cure for chronic hepatitis B, bringing the total to ten patients to date. The company also recognized revenue from a milestone payment under its LNP license with Alnylam for a hepatocellular carcinoma treatment, further validating its proprietary delivery platform.

Arbutus Biopharma Corporation (NASDAQ:ABUS) develops therapies targeting infectious diseases, including chronic hepatitis B.

1. MiMedx Group Inc. (NASDAQ:MDXG)

Number of Hedge Fund Holders: 33

MiMedx Group Inc. (NASDAQ:MDXG) is one of the best biotech penny stocks to buy in 2026. On March 23, MiMedx officially announced the commercial launch of CHORIOFIX, the latest addition to its portfolio of advanced placental allografts. This organically developed product is a lyophilized human placental allograft designed to serve as a protective barrier for both acute and chronic wounds. It is specifically engineered to address complex clinical needs, such as large deficits and deep, tunneling wounds, which are historically difficult to treat effectively.

The allograft features a unique triple-layer construction, consisting of two chorion layers with an intact intermediate layer. This configuration makes CHORIOFIX the thickest product in the MiMedx portfolio to date, significantly enhancing its handling characteristics during positioning and suturing. Furthermore, its uniform, dual-sided design eliminates the need for specific orientation during application, providing a more streamlined experience for surgical and clinical staff.

In line with its focus on evidence-based outcomes, MiMedx Group Inc. (NASDAQ:MDXG) has integrated CHORIOFIX into its CAMPAIGN trial. This prospective randomized controlled trial is designed to evaluate the clinical performance of CHORIOFIX and EPIEFFECT against the standard of care in treating non-healing diabetic foot ulcers.

MiMedx Group Inc. (NASDAQ:MDXG) develops and sells placental tissue allografts to several sectors of the healthcare industry. It is involved in the processing of human placental tissues, the membrane, the umbilical cord, and the placental disc. It offers a range of wound care products, including Regentkit wound gel, Epicord, Epixpress, Choriofix, and more.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.