In this article, we discuss 5 biotech penny stocks with growth catalysts. If you want to see some more stocks in this selection, click 10 Biotech Penny Stocks with Growth Catalysts.
5. Brickell Biotech, Inc. (NASDAQ:BBI)
Number of Hedge Fund Holders: 5
Share Price as of April 5: $0.265
Brickell Biotech, Inc. (NASDAQ:BBI) is a Colorado-based clinical stage biotechnology company that primarily develops prescription therapeutics for treating dermatological conditions and other prevalent skin diseases. The shares of Brickell Biotech, Inc. (NASDAQ:BBI) were priced at $0.265 as of April 5.
The company recently shifted focus from dermatology to inflammatory and autoimmune diseases. Brickell Biotech, Inc. (NASDAQ:BBI)’s lead asset is BBI-02, a novel DYRK1A inhibitor that is expected to be clinically tested in the first half of 2022, and the Phase I data from the trials will be gathered by year end. Upon receiving positive affirmation from the clinical trial, BBI-02 has development potential in a range of autoimmune and inflammatory diseases, where its differentiated mechanism could lead to significant value for Brickell Biotech, Inc. (NASDAQ:BBI).
On March 8, William Blair analyst Tim Lugo initiated coverage of Brickell Biotech, Inc. (NASDAQ:BBI) with an Outperform rating and a $2 fair value estimate. With the company’s early-stage pipeline targeting novel mechanisms in autoimmune and inflammatory conditions, Brickell Biotech, Inc. (NASDAQ:BBI)’s pivot from its dermatology focus can be commercially huge, the analyst told investors in a research note. He believes the present valuation “holds a strong risk/reward profile” as compared to industry rivals, offering the possibility for a “10-fold increase” from current levels.
According to Insider Monkey’s Q4 data, 5 hedge funds were bullish on Brickell Biotech, Inc. (NASDAQ:BBI), compared to 3 funds in the earlier quarter. The total stakes held in the fourth quarter were valued at $865,000.
4. CTI BioPharma Corp. (NASDAQ:CTIC)
Number of Hedge Fund Holders: 11
Share Price as of April 5: $4.755
CTI BioPharma Corp. (NASDAQ:CTIC) was incorporated in 1991 and is headquartered in Seattle, Washington. The company specializes in the development and commercialization of targeted therapies for blood-related cancers in the United States.
On February 28, the FDA approved CTI BioPharma Corp. (NASDAQ:CTIC)’s VONJO for the treatment of adults with intermediate and high-risk primary or secondary myelofibrosis with a low platelet count. Limited treatment options have classified this disease as an area of urgent unmet medical need. CTI BioPharma Corp. (NASDAQ:CTIC)’s VONJO is a safe treatment option for myelofibrosis, and the development of the drug is a significant growth catalyst for the company.
Brookline analyst Leah Rush Cann raised the price target on CTI BioPharma Corp. (NASDAQ:CTIC) on March 1 to $12 from $7.20 and reiterated a Buy rating on the shares after the company reported the FDA approval for VONJO.
According to Insider Monkey’s fourth quarter database, 11 hedge funds were bullish on CTI BioPharma Corp. (NASDAQ:CTIC), with combined stakes worth $56.6 million. Mark Lampert’s Biotechnology Value Fund / BVF Inc is the biggest shareholder of the company, with approximately 9 million shares worth $22.1 million.
3. Sorrento Therapeutics, Inc. (NASDAQ:SRNE)
Number of Hedge Fund Holders: 12
Share Price as of April 5: $2.24
Sorrento Therapeutics, Inc. (NASDAQ:SRNE) is a clinical stage and commercial biotechnology company that develops novel therapies for cancer, autoimmune, inflammatory, viral, and neurodegenerative diseases. The company was founded in 2006 and is based in San Diego, California.
Sorrento Therapeutics, Inc. (NASDAQ:SRNE) announced on March 31 that the FDA has cleared the commencement of the Phase 3 clinical trial of Abivertinib in severe COVID-19 patients. Sorrento Therapeutics, Inc. (NASDAQ:SRNE) published preliminary results of two phase 2 studies that showed patients suffering from severe pneumonia due to COVID-19, especially those needing non-invasive ventilation or high flow oxygen supplementation, were five times more likely to benefit from Abivertinib therapy than the ones who needed low flow supplementation. The study will be conducted at multiple sites in the United States, Mexico, and Brazil. This will be an important growth catalyst for Sorrento Therapeutics, Inc. (NASDAQ:SRNE) upon conclusion.
According to Insider Monkey’s fourth quarter database, 12 hedge funds were bullish on Sorrento Therapeutics, Inc. (NASDAQ:SRNE), compared to 10 funds in the earlier quarter. D E Shaw held a significant stake in the company, with 2.4 million shares worth $11.3 million.
2. Verastem, Inc. (NASDAQ:VSTM)
Number of Hedge Fund Holders: 16
Share Price as of April 5: $1.51
Verastem, Inc. (NASDAQ:VSTM) is a biotechnology company that develops medication and treatments for oncology patients. The company was incorporated in 2010 and is headquartered in Needham, Massachusetts. Priced at $1.51, Verastem, Inc. (NASDAQ:VSTM) is a significant biotech penny stock that exhibits growth catalysts.
On March 28, Verastem, Inc. (NASDAQ:VSTM) announced that it has received a funding of up to $150 million from Oxford Finance via a credit facility for the commercial preparation and potential launches of VS-6766 and defactinib, which are treatments for ovarian cancer and lung cancer.
Truist analyst Srikripa Devarakonda initiated coverage of Verastem, Inc. (NASDAQ:VSTM) on March 9 with a Buy rating and a $6 price target. According to the analyst, the stock is “undervalued” given its directed programs in two cancers. Devarakonda added that Verastem, Inc. (NASDAQ:VSTM) can benefit from a $470 million market opportunity in ovarian cancer, as well as the “early but strong” clinical data and positive expert feedback.
The Q4 database of Insider Monkey suggests that 16 hedge funds were bullish on Verastem, Inc. (NASDAQ:VSTM), with collective stakes worth approximately $106 million. Julian Baker and Felix Baker’s Baker Bros. Advisors is the largest shareholder of the company, with roughly 21.5 million shares valued at $44 million.
1. Adagio Therapeutics, Inc. (NASDAQ:ADGI)
Number of Hedge Fund Holders: 17
Share Price as of April 5: $4.13
Adagio Therapeutics, Inc. (NASDAQ:ADGI) is a clinical-stage biotech company that specializes in the development and commercialization of antibody-based treatments for infectious diseases. The company was incorporated in 2020 and is based in Waltham, Massachusetts.
On March 30, Adagio Therapeutics, Inc. (NASDAQ:ADGI) reported that the primary endpoints were met with statistical significance for all three indications in its ongoing global Phase 2/3 clinical trials that evaluate Adintrevimab (ADG20) as a treatment for COVID-19. A significant decline in cases of COVID-19 was observed with Adintrevimab as compared to placebo. Based on these results, Adagio Therapeutics, Inc. (NASDAQ:ADGI) plans to reach out to the FDA and submit an Emergency Use Authorization application in the second quarter of 2022 for Adintrevimab for the prevention and treatment of COVID-19. Upon FDA approval, this treatment will be a consequential growth catalyst for Adagio Therapeutics, Inc. (NASDAQ:ADGI).
According to Insider Monkey’s fourth quarter database, 17 hedge funds placed long bets on Adagio Therapeutics, Inc. (NASDAQ:ADGI), up from 12 funds in the prior quarter. Peter Kolchinsky’s RA Capital Management is the leading shareholder of the company, with approximately 5 million shares worth $36.2 million.
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