Top Biotech Penny Stocks to Watch (2024)

Biotech penny stocks are low-priced shares in small companies that use biological systems and living organisms to create and develop new products and treatments. These stocks are known for their high volatility and potential for significant returns, driven by factors such as clinical trial results, regulatory approvals, and sector-specific news. But watch out — these sketchy stocks have a propensity to dilute their float to raise cash, tanking share value in the process.

Top Biotech Penny Stocks to Watch

My biotech stock picks for September 2024 are:

• NASDAQ: SHOT — Safety Shot Inc — The Solid News For a Change Short Squeeze Penny Stock
• NASDAQ: ARQT — Arcutis Biotherapeutics Inc — The Biotech Stock That Analysts Are Noticing
• NASDAQ: VOR — Vor Biopharma Inc — The Positive Study Results Biotech Stock
• AMEX: TOVX — Theriva Biologics Inc — The Reverse-Split Biotech Stock That Jack Is Watching

Disclaimer: This is a watchlist, not a forecast. There’s no guarantee these stocks will offer a trading opportunity or help you hit your trading targets. Keep them on your watchlist, but only trade when you see YOUR best setup.

When there are no truly great trades, use your time to study.

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Here’s some background info on biotech penny stocks:

• What is the most promising biotech penny stock?

A stock with a lot of volatility like Safety Shot Inc (NASDAQ: SHOT) is a good bet for the most promising biotech penny stock. Remember, we’re traders, not investors. We’re watching the stocks on this list for short-term moves, not predicting which of these stocks will still be around in 2030.

• What are the top 3 biotech penny stocks to buy now?

My top 3 biotech penny stocks to buy now (as long as their price action is strong) are Safety Shot Inc (NASDAQ: SHOT), Arcutis Biotherapeutics Inc (NASDAQ: ARQT), and Vor Biopharma Inc (NASDAQ: VOR).

• Which biotech penny stocks have a “Strong Buy” analyst rating?

Analysts don’t give any biotech penny stocks “strong buy” ratings. These stocks are sketchy and unstable, and should never be investment targets. Always trade with a plan.

Now, let’s get to the top biotech penny stocks to watch this month.

Biotech Penny Stock to Watch #1: Safety Shot Inc (NASDAQ: SHOT) — The Solid News For a Change Short Squeeze Penny Stock

My first biotech penny stock pick is Safety Shot Inc (NASDAQ: SHOT).

This is a huge former spiker from November of 2023. The stock got stuck in a short squeeze and the price surged 480%* that month!

There’s a chart below, every candle represents one trading day:

Past spikers can spike again.

And toward the end of August and early September, SHOT actually announced some decent news… five real catalysts that could inspire another stock spike.

And this time, the spike isn’t just short sellers blowing up …

1. August 15: Bullish earnings for Q2 (40% increase in sales and a 17% decrease in operating expenses).
2. August 28: Business partnership with e-commerce company VENDO.
3. August 29: Confirmed breakthrough of product that decreases hangover symptoms.
4. September 4: Company president invests $3.4 million.
5. September 6: Allowance of new patent.

The stock spiked 100%* from its lows in August as it announced these catalysts. And the price could surge higher after its recent consolidation under $1.

Use my AI trading bot, XGPT, to build smart positions on the market’s most volatile setups.

Just enter the ticker that you’re watching and it will spit out a trade plan that follows my process!

Biotech Penny Stock to Watch #2: Arcutis Biotherapeutics Inc (NASDAQ: ARQT) — The Biotech Stock That Analysts Are Noticing

My second biotech penny stock pick is Arcutis Biotherapeutics Inc (NASDAQ: ARQT).

One of the most compelling reasons why this stock is on the watchlist, the multi-month chart shows a lot of strength.

The price spiked in early 2024, and for the rest of the year it’s been consolidating.

Take a look below, every candle represents one trading day:

This biotech company works to develop treatments for immune-mediated dermatology conditions. And recently it announced positive data for its treatment of atopic dermatitis in children aged 2 to 5.

Not to mention, in recent weeks the stock’s been mentioned favorably by analysts such as Jeffries Financial Group and Mizuho Bank.

The momentum is building for ARQT …

Biotech Penny Stock to Watch #3: Vor Biopharma Inc (NASDAQ: VOR) — The Positive Study Results Biotech Stock

My third biotech penny stock pick is Vor Biopharma Inc (NASDAQ: VOR).

On September 5, this company announced that new data supported its use of shielded transplants to introduce specific therapies.

Biotechs have been especially volatile in the last few months, and VOR is a great example. The price spiked 80% in tandem with the news, during after hours.

The move didn’t last very long, but it shows the stocks ability to spike with a hot catalyst.

It’s only a matter of time until the company tries to spike the stock price again …

Biotech Penny Stock to Watch #4: Theriva Biologics Inc (AMEX: TOVX) — The Reverse-Split Biotech Stock That Jack Is Watching

My fourth biotech penny stock pick is Theriva Biologics Inc (AMEX: TOVX).

Jack Kellogg is one of my most successful students.

In a fraction of my trading career, he’s pulled $12.8 million in trading profits from the market (including losses). That’s compared to my $7.7 million. I’ve been trading over two decades, Jack started in 2017.

That shows you the importance of having a mentor.

I had to learn these setups on my own. And the lack of guidance stunted my profitability.

But Jack had a mentor (yours truly).

He was able to learn the correct lessons from the beginning, and as a result, he’s mastered this process better than I ever could.

See his notes for TOVX below:

I had to redact some of Jack’s trade plans for legal reasons.

There are always sketchy promoters trying to riff off of me and my hard-working students.

For those who are interested, learn Jack’s next big trade: This is where he posts his setups!

TOVX is an ultra low-float biotech stock. There’s less than 1 million shares in the float. Plus, it’s already shown us that it can spike. The price ran 110%* at the end of August.

There’s more volatility ahead!

What Are Biotech Penny Stocks?

Biotech penny stocks refer to shares of small biotech companies that trade for less than $5 — stocks in pharmaceutical companies with drugs in development. Recent biotech spikers have come from the following areas:

• Companies working on COVID-19 vaccines and tests
• Companies working in pandemic relief and control
• Firms researching cancer medicines and immuno-oncology drugs
• Companies developing medicines for rare disorders

These companies are usually desperate for cash from investors. They need it to send their products through multiple phases of testing and stages of trials.

That’s their focus in the markets — to keep stock prices high by selling their progress. When their share prices grow enough, they’ll dilute to cash in, leaving bag holders with big losses…

They’re known to be extremely volatile. One minute they’re flying high on positive headlines — the next they’re down due to bad trial results, side effects on patients, FDA approval issues, or stock dilution.

That’s why I ride the hype but never believe it.

Penny stocks are some of the sketchiest stocks in the market. They suck in newbies with their upside, and these newbies start to believe as share value increases…

There are ways to profit off biotech stocks — as long as you know how the niche works. I learned by making my own mistakes.

I started trading in high school. By the time I graduated college, I had grown my small account from $12,415 to roughly $2 million. I also made some world-class blunders. Read all about it in my best-selling no-cost book, “An American Hedge Fund.”

I’ve now made over $7.7 million in profits. So far, I’ve taught 30+ millionaire students how to trade with a small account in my Trading Challenge.

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Challenge students get access to all my top tips and trading education resources — including my daily watchlists.

To become a self-sufficient trader, you have to learn how to build your own watchlist. So study up and learn the logic behind my stock picks…

Is It a Wise Decision to Invest in Biotech Penny Stocks?

These stocks are high-risk, high-reward plays in the biotech industry, offering potential for significant gains but also carrying substantial risk. In this article, we’ll delve into the pros and cons of investing in biotech penny stocks, the factors to consider, and why some biotech penny stocks might be better picks than others.

While the focus here is on biotech stocks, you might be wondering if penny stocks can be a long-term investment. The answer is nuanced. While they’re generally considered short-term plays, there are exceptions. Want to know more about how to approach penny stocks for the long haul? Here’s a guide that delves into long-term strategies with penny stocks.

Biotech Stocks Under $5

The allure of hot sector stocks, especially when they’re also penny stocks, is undeniable. These stocks present a unique blend of opportunity and volatility. The biotech industry is booming, with advancements and applications spreading across various sectors, from drug development to gene editing, making biotech stocks a magnet for investors looking for the next big breakthrough. The gains here can be proportionately greater than those from more established stocks, mainly because even minor positive developments or clinical trial results can send their prices soaring.

However, it’s crucial to approach these opportunities with a clear strategy and an understanding of the risks involved. The volatility of penny stocks, combined with the speculative nature of biotech ventures, means that while the potential for rapid gains is significant, the risk of losses is equally high. Conduct thorough research, looking beyond the hype. And never invest in these stocks — only trade them.

Remember, the key to success in trading biotech stocks under $5 is not just about jumping on every opportunity but being selective and strategic. It’s about leveraging the explosive potential of the biotech sector while managing risk meticulously. By focusing on companies with the potential to lead in their niche, traders can capitalize on the disproportionate gains that these penny stocks offer, all while keeping their investment strategy tight and cutting losses quickly.

My best tip is to look beyond biotech penny stocks — healthcare and medical stocks give traders the same upside potential and trade-worthy volatility. Researching these stocks can help you diversify your trading portfolio and give you a better chance to be watching a hot stock when it pops off. Check out my watchlist of Healthcare and Medical Stocks.

What Is the Best Biotech Stock To Buy Right Now?

I can’t tell you the “best” biotech stock to buy right now because the market is always changing. What I can tell you is to look at factors like market cap, liquidity, and EPS (earnings per share). These are crucial indicators that can give you an edge. I’ve been trading for years, and I can tell you that understanding these metrics is a game-changer.

You can get your intel from TipRanks links and Wall Street analysts — but remember, they’re not always right. You’ve got to do your own research. Dive into the company’s pipeline, check out their science, and maybe even look into the careers of the top executives. The more you know, the better your strategy will be.

There’s no need to limit yourself to sketchy biotechs in the US — check out this list of top pharmaceutical stocks in Canada! Vancouver is a hub of biotech activity, and Toronto is where insulin was discovered so you know it isn’t Canada’s first biotech rodeo. For more ideas, visit my article on the Top Pharmaceutical Stocks in Canada.

Why Other Biotech Penny Stocks Were Not Chosen

When it comes to biotech penny stocks, not all are created equal. Some have strong growth potential backed by innovative therapies and treatments for diseases, while others might just be riding the hype. It’s crucial to conduct thorough analysis before diving in. Let’s explore why some biotech penny stocks might not make the cut.

• Clinical Indications and Approvals: Biotech companies often focus on specific clinical indications. If a company doesn’t have any therapies or treatments that have received approvals or shown promise in clinical trials, it’s a red flag. Regulatory approvals are milestones that can significantly impact a biotech company’s stock price.
• Financial Health: Revenue and Debt: Another critical factor is the company’s financial health. A biotech company with high debt and low revenue is a risky investment. Always check the balance sheet. Brokers and analysts often provide this information, but it’s best to do your own due diligence. Look at rates of revenue growth and how the company manages its debt.

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Remember: the stocks in my newsletters aren’t automatic buys. You should only listen to your own opinions. Do your own due diligence and research before considering a stock for your trading portfolio.

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Its Breaking News Chat feature is a game-changer — it helped me make over $1 million in trading profits in 2021, when biotech news was behind many of the best spikers I’ve seen in my 20+ years trading. I seriously think every trader should have this tool working for them. It’s one of the best trading platforms out there.

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Things You Need to Know Before Investing in Biotech Penny Stocks

Thanks to their volatility, biotechs can drain your investments faster than you can enter the ticker name in the order window. Banks and traditional finance institutions often steer clear of these for a reason. But if you’re like me, you see the potential for massive gains. I’ve been teaching trading strategies for years, and one thing I always emphasize is risk management.

Before you even think about diving in, understand the economy you’re playing in. Look at dividends, if any, and how the company is positioned in its region. Check out exchanges where the stock is listed; some are more reputable than others. And for heaven’s sake, don’t put all your eggs in one basket. Diversification is key.

If you’re already committed to doing your homework, why not take it a step further? There are biotech companies out there that are just waiting to be discovered. These hot biotechs could be the next big thing, and your research could lead you right to them.

Interested in finding these hidden gems? Check out this list of former runners. And remember…

Former runners can run again!

How To Trade Biotech Penny Stocks The Right Way

So you’re still with me? Good. Hopefully, the Instagram trading influencers have already clicked off to go blow up their accounts. Trading biotech penny stocks the right way involves a well-thought-out strategy. I’ve been in this game long enough to know that you can’t rely on luck. You need a solid plan, and you need to stick to it.

First off, don’t ignore the news and events surrounding the biotech sector. This industry is heavily influenced by views from the scientific community, FDA approvals, and other significant events. Keep an eye on these, and you’ll be ahead of the game. Also, consider using credit cards wisely to manage your liquidity, but be cautious of the risks involved.

How do you get ahead of the game? That’s all about finding a biotech penny stock before it makes headlines. It’s possible, but it requires a specific approach. Learn my method for finding penny stocks pre-spike here.

Legal Considerations When Trading Biotech Penny Stocks

When trading biotech penny stocks and other small-cap stocks, you need to understand the legal considerations specific to these securities. It’s not that you’re going to make a mistake and get your account locked down — that’s something you’ve got to watch out for inallstocks if you’re under the PDT — but keeping your eye off the ball with sketchy therapeutics companies can cost you money.

The biotech sector is heavily regulated, and this complexity adds layers of risk. Regulators are on the lookout for snake-oil salesmen behind the latest penny stock “innovations” — these are the major ways that biotech stocks are affected:

• Complex regulatory environment
• High risk of volatile price movements
• Increased scrutiny from regulatory bodies
• Potential for insider trading violations
• Mandatory disclosure requirements

Compliance With SEC Regulations

The Securities and Exchange Commission (SEC) plays a big role in regulating stocks. This is what your favorite biotech penny stock should be aware of:

1. Registration of Securities: Companies must register their securities with the SEC.
2. Disclosure of Information: Detailed financial information must be disclosed.
3. Reporting Requirements: Regular financial reports must be filed.
4. Prohibition of Fraudulent Activities: Strict rules against fraud and market manipulation.
5. Broker-Dealer Requirements: Brokers must comply with specific regulations when handling penny stocks.

Awareness of Penny Stock Rules (SEC Rule 15g-9)

Penny stocks are defined as stocks trading for less than $5 per share and are subject to SEC Rule 15g-9. This rule aims to protect investors from high-risk investments by ensuring that brokers follow specific compliance procedures.

• Brokers must provide a disclosure document outlining the risks of penny stocks.
• Investors must sign and return a copy of this document before any trades are executed.
• Brokers must determine that penny stock transactions are suitable for the investor.
• Monthly account statements must be provided to the investor.

Understanding Insider Trading Laws

Insider trading involves trading a public company’s stock based on non-public, material information about the company. This practice is illegal and carries severe consequences, especially in the biotech sector, where insider information can significantly impact stock prices.

This is one of the big “tells” behind sketchy biotech stocks that you absolutely should not be holding overnight. Watch out for the following:

• Fines and penalties imposed by the SEC
• Criminal charges leading to imprisonment
• Permanent bans from trading activities
• Significant reputational damage

Disclosure Requirements

Several types of disclosures are legally required when trading biotech penny stocks to maintain transparency and protect investors.

1. Material Event Disclosure: Significant events like mergers or product approvals.
2. Financial Statement Disclosure: Detailed and accurate financial statements.
3. Management Discussion and Analysis: Insight into financial health and management strategies.
4. Risk Factor Disclosure: Potential risks involved in the investment.
5. Insider Holdings Disclosure: Information about shares held by insiders.

These disclosures help maintain market integrity and protect investors by ensuring they have access to all material information before making investment decisions.

Risks of Market Manipulation

Market manipulation is a significant risk in the penny stock market, especially in the biotech sector. As always, do your due diligence, be skeptical of overly positive news, and monitor trading volumes for unusual spikes.

And watch out for these tricks!

• Promoter pumps: Artificially inflating stock prices before selling off.
• Spoofing: Placing and then canceling large orders to manipulate prices.
• Wash trading: Simultaneously buying and selling shares to create fake volume.

Impact of Regulatory Approvals and Rejections

The prices of biotech penny stocks are highly sensitive to FDA regulatory approvals and rejections. A positive FDA decision can send stock prices soaring, while a rejection can lead to significant losses.

Biotech Penny Stocks: The Bottom Line

Penny stock trading is a great way to build your account as a new trader. Biotech penny stocks are some of the hottest movers on the market — but this volatility can cut both ways..

Key Considerations:

• A lot of penny stocks are shady. Risk in biotech penny stocks can be heightened due to limited company information and unsavory promotion. When the price gets up high enough, nine times out of 10 these companies will do new share offerings, tanking share price.
• There’s a possibility for big gains. I trade biotech penny stocks because you can trade conservatively and still rack up gains. These stocks can go supernova at any time. Aim for “the meat of the move.”
• These companies are often young. Some biotech penny stocks are newer companies, and can dramatically shift their market trajectory and valuation.

Trading isn’t rocket science. It’s a skill you build and work on like any other. Trading has changed my life, and I think this way of life should be open to more people…

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Have you traded penny biotech stocks? Write “I always trade with a plan” in the comments!

Biotech Penny Stock FAQs

What Biotech Sectors Should I Focus On?

When it comes to biotechnology, you’ve got a smorgasbord of options. Genomics and cell therapies are hot right now. Don’t overlook stem cells; they’re a cornerstone in healthcare solutions. Diversifying across these sectors can be a smart move.

What Investment Vehicles Are Suitable for Biotech Penny Stocks?

You’ll hear me say it a million times: diversification is key. Consider ETFs that focus on biotech. If you’re into individual stocks, keep an eye on ipo listings and blue-chip companies that have a biotech arm. Setting a price target can help, and don’t forget, you can also use an ira to hold these assets.

How Do Market Dynamics Affect Biotech Penny Stocks?

Market dynamics are the bread and butter of trading. Keep an eye on buyers and their positions, especially in penny shares and penny stocks. Pharmaceutical stock can be volatile, so understanding the market sentiment is crucial.

How Can I Analyze Biotech Penny Stocks?

We’re here for the long haul, so get familiar with the tools of the trade. A stock biotech chart is invaluable for technical analysis. Keep a stocks list for quick reference, and don’t forget to compare pharma stocks to get a broader view.

What Additional Factors Should I Consider?

You don’t have to mirror my techniques, but you should watch the stock charts of former runners like Nymox Pharmaceutical Corp (OTCPK: NYMXF), Ardelyx, Inc. (NASDAQ: ARDX), and Rigel Pharmaceuticals, Inc. (NASDAQ: RIGL). Articles and technology updates can provide valuable insights. Sales figures, types of services offered, and partnerships can also be indicators of a stock’s potential. Exercise caution and listen to the response from scientists in the field to make an informed decision.

*Past performance does not indicate future results