In this article we will list the 10 best small-cap biotech stocks under $10 in 2021.
We like healthcare and technology industries because of their above-average long-term growth prospects. Biotechnology is at the intersection of healthcare and technology. According to IBIS World, biopharmaceuticals’ revenue share is expected to grow over the next 5 years through 2025. The industry, according to IBIS, would be least affected by declining investment levels in 2020. Grand View Research believes that global biotech market size is expected to reach $727.1 billion by 2025, growing at a CAGR of 7.4%.
These key growth themes in the industry include regenerative medicine and genetics in diagnostics. R&D around regenerative therapies is also expected to drive growth of the biotech industry through 2025.
Biotechnology has a long development lead-time. It often takes a decade to get a new drug from incubation to the pharmacy shelves. Since the working principle of biopharmaceuticals industry heavily relies on investment in research and development (R&D) to develop new treatments and stay competitive in the market, it is chiefly reliant on investment.
In a previous article we listed the 12 best large-cap biotech stocks to buy. These large-cap companies usually self-finance their R&D and are relatively less risky than small-cap biotech stocks which have to go through multiple rounds of capital raises. On the plus side small-cap biotech stocks offer enormous upside potential if you know how to pick them. With the aid of hedge funds’ expertise in research aptitude and analytic approach towards the biotech field, we have listed some of the best small cap biotech stocks to invest under $10 in 2021.
We used Yahoo Finance’s screener to identify small-cap biotech stocks under $10. Then we ranked these stocks using our hedge fund sentiment data to come up with the list of the 10-best small-cap biotech stocks to buy under $10.
You have to keep in mind that our rankings represent hedge funds’ list of 15 best small-cap biotech stocks to buy. Our premium newsletters might have a different opinion (or no opinion at all) on these stocks. Articles like this one is the first step in our idea generation process. Once we identify a promising investment idea, we spend a week or two going through its quarterly and annual filings, earnings call transcripts, its competitors’ earnings call transcripts, etc. and determine whether the stock is an attractive investment like the 2 dozen stocks we identified and recommended in our monthly newsletter. This rigorous research approach helped us to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 88 percentage points since March 2017 (see the details here).
Keeping this in mind, let’s now take a look at the best small-cap biotech stocks to buy under $10 in 2021.
10. BioDelivery Sciences International, Inc. (NASDAQ: BDSI)
No of Hedge Funds: 21
Total Value of HF Holdings: $88 Million
With its leading product BELBUCA BioDelivery Sciences International Inc is growing at a rapid pace as a commercial-stage specialty pharmaceutical company for patients living in chronic pain.
Bio-Delivery Sciences is known for its Bio-Erodible Muco-Adhesive (BEMA) technology and other drug delivery technologies to develop and commercialize medicines. The company has FDA approvals for ONSOLIS (fentanyl buccal soluble film), as well as BUNAVAIL (buprenorphine and naloxone buccal film) buccal film and BELBUCA (buprenorphine) buccal film. It also has the rights to opioid-induced constipation med Symproic.
BDSI seeks partnerships and product licenses in the areas of neurology, pain, psychiatry, and selected rare diseases. Despite ongoing COVID-19 pandemic, BELBUCA abides solid sales growth, and has increased its market share in its niche.
The company continues to deliver comprehensive sales growth despite COVID-19 challenges and has become increasingly cash flow positive. For the trailing twelve months (TTM), Bio Delivery Sciences International’s revenues have increased by 43% to $145.94 million. Net income has soared to $14.82 million, compared to a loss $15.31 million. The stock is trading above $4.00 and has surpassed the market cap of $400 million.
BELBUCA net sales at $34.8 million, registered an increase of 31% versus the prior-year period. Symproic delivered net sales of $3.5 million, with an increase of 59% compared to the same period for the last year.
9. Ardelyx, Inc. (NASDAQ: ARDX)
No of Hedge Funds: 21
Total Value of HF Holdings: $180 Million
Ardelyx, Inc. is a clinical-stage patient focused and outcome driven biopharmaceutical company. The company is dedicated to improve the lives of patients by developing and commercializing first-in-class targeted therapies that advances patient well being.
The company’s leading candidate, tenapanor, is a small molecule therapy under FDA review for the control of serum phosphorus in adult patients with chronic kidney diseases (CKD) on dialysis. If approved, tenapanor would become a foundational therapy for all patients on dialysis suffering from hyperphosphatemia, a condition of elevated levels of phosphate in blood, by completely changing the treatment paradigm and making it an effective and consistent phosphate control procedure.
There are no significant changes in the company’s fundamentals. It is a good long-term opportunity for investors at current price levels. For the TTM, Ardelyx’s revenues increased by 52% to $8.01 million. Net loss has decreased by 10% to $85.23 million.
8. Aptose Biosciences Inc. (NASDAQ: APTO)
No of Hedge Funds: 21
Total Value of HF Holdings: $200 Million
Aptose Biosciences is a science-driven clinical-stage biotechnology company, developing targeted agents to address the unmet clinical need in chronic lymphocytic. There are some encouraging points to draw from the data provided by Aptose about its leading drug (CG-806) Phase 1a/b Trial for patients with CLL and NHL B- cell Cancers.
Aptose’s net loss in the September quarter came in at $13.3 million, or $0.15 per share, compared with $6.8 million, or $0.12 per share, for the same quarter last year. Total cash and cash equivalents and investments as of September 30, 2020 were $132.7 million.
Consonance Capital and Nantahala Capital are the top two shareholders of APTO, collectively owning more than 16% of the company.
7. Aeglea BioTherapeutics, Inc. (NASDAQ: AGLE)
No of Hedge Funds: 22
Total Value of HF Holdings: $147 Million
Aeglea Bio Therapeutics Inc makes treatment for rare metabolic disorders and develops novel medicines. Heading into the fourth quarter of 2020, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 16% from one quarter earlier. On the other hand, there were a total of 13 hedge funds with a bullish position in AGLE a year ago.
Some of the major shareholders of the company include Samsara BioCapital and Nantahala Capital Management.
During the third quarter of 2020 AGLE lost $18 million. In October 2020, the company made about $24.6 million in net proceeds from shares of common stock sold under its ATM program.
6. BioCryst Pharmaceuticals, Inc. (NASDAQ: BCRX)
No of Hedge Funds: 22
Total Value of HF Holdings: $156 Million
BioCryst Pharmaceuticals makes treatment for contagious and inflammatory diseases. The research and development section of the company is an interplay of manifold scientific disciplines like biology, computer modeling, and biochemistry. The novel small molecules drugs are produced and tested for uncomplicated influenza, seasonal influenza and hereditary angioedema. The company recently announced the approval of ORLADEYO in Japan for the Prophylactic Treatment of Hereditary Angioedema. ORLADEYO will be commercialized in Japan by BioCryst’s partner, Torii Pharmaceutical Co., Ltd. In December, BCRX also announced that the FDA approved its oral, once-daily ORLADEY (berotralstat) for prophylaxis to prevent attacks of hereditary angioedema (HAE) in adults and pediatric patients 12 years and older.
BCRX lost $46 million during the third quarter of 2020. The company had $148.5 million in cash, cash equivalents, and investments at the end of September. In December BCRX announced $325 million in funding from Royalty Pharma (RPRX) and Athyrium Capital Management.
5. Assembly Biosciences Inc. (NASDAQ: ASMB)
No of Hedge Funds: 22
Total Value of HF Holdings: $195 Million
Assembly Biosciences Inc is a clinical-stage biotechnology company that primarily works on the treatment of hepatitis B (HBV). It is focusing on chronic HBV and novel oral biotherapeutic candidates for the treatment of disorders associated with the microbiome. In December 2020 the company announced that it will wind-down its microbiome program to focus on the advancement of its pipeline of novel core inhibitors for chronic HBV.
In the third quarter, the company posted a GAAP EPS of -$0.09, above the Street’s estimates by $0.69. Revenue in the quarter jumped 718% to reach $34.61 million, beating the Street’s estimates by $28.17 million.
4. Dynavax Technologies Corp. DVAX (NASDAQ: DVAX)
No of Hedge Funds: 23
Total Value of HF Holdings: $58 Million
Dynavax makes treatment for human body’s immune system stability. The company works on adjuvant vaccine for hepatitis B by utilizing expertise of Toll-like Receptor (TLR) biology. It is known for Hepatitis B vaccine HEPLISAV-B.
In January 2021, Dynavax Technologies Corporation announced that the first participant has been dosed in the Phase 2 clinical trial evaluating MVC’s COVID-19 vaccine candidate, MVC- COV1901. MVC-COV1901 is a subunit vaccine with recombinant S-2P antigen adjuvanted with CpG 1018 supplied by Dynavax.
3. WAVE Life Sciences Ltd. WVE (NASDAQ: WVE)
No of Hedge Funds: 24
Total Value of HF Holdings: $163 Million
WAVE Life Sciences deals in nucleic acid therapeutics. The company is developing a portfolio of stereo pure drug candidates that target underlying rare genetic diseases in human body. In the third quarter, net loss came in at $33.10 million, while revenue in the period totaled $3.45 million.
2. Kadmon Holdings LLC KDMN (NASDAQ: KDMN)
No of Hedge Funds: 24 Total Value of HF Holdings: $304 Million
The company is engaged in the discovery, development and commercialization of small molecules and biologics to address disease areas of significant unmet medical needs. Earlier in January, the company’s shares rallied after hedge fund manager Steve Cohen’s Point72 Asset Management reported a 5.3% stake in the company, representing about 9.05 million shares.
1. IVERIC bio-Inc. ISEE (NASDAQ: ISEE)
No of Hedge Funds: 26 Total Value of HF Holdings: $278 Million
Iveric Bio makes treatment for retinal diseases with significant unmet medical needs. In April 2020, the company said the FDA granted Fast Track designation to Zimura, the company’s C5 inhibitor for the treatment of geographic atrophy (GA) secondary to dry age-related macular degeneration (AMD). In the third quarter, ISEE posted Q3 GAAP EPS of -$0.27, missing the Street’s forecast by $0.05.
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This article is originally published at Insider Monkey.
