What Are the Best Biotech Penny Stocks to Watch in 2021?

Biotech penny stocks are a popular choice for investors looking to diversify their portfolios with high-risk, high-reward opportunities. With the biotech industry rapidly growing and advancing, it can be challenging to determine which penny stocks are worth watching in 2021. In this article, we’ll explore the bestbiotech penny stocksto watch and provide insights into their potential growth, risks, and investment strategies.

What Are Biotech Penny Stocks?

Biotech penny stocks are stocks of small companies that specialize in developing innovative treatments for medical conditions. These companies often have a market capitalization of less than $300 million and trade at a low price per share, making them affordable for retail investors. Biotech penny stocks are considered high-risk investments due to their volatility, lack of liquidity, and regulatory approval process. However, successful biotech penny stocks can provide significant returns for investors who are willing to take the risk.

Top Biotech Penny Stocks to Watch in 2021

1. Novan Inc. (NOVN)

Novan Inc. is a clinical-stage biotech company that focuses on developing and commercializing innovative therapies for dermatological conditions. The company’s lead product candidate is SB206, a topical antiviral gel for treating molluscum contagiosum, a common skin infection. Novan also has several other product candidates in the pipeline, such as SB204 for acne and SB414 for inflammatory skin diseases.

2. Bellerophon Therapeutics Inc. (BLPH)

Bellerophon Therapeutics Inc. is a clinical-stage biotech company that focuses on developing innovative therapies for cardiopulmonary diseases. The company’s lead product candidate is INOpulse, a proprietary pulsatile nitric oxide delivery system for treating pulmonary arterial hypertension (PAH). Bellerophon is also developing INOpulse for the treatment of pulmonary hypertension associated with chronic obstructive pulmonary disease (COPD) and pulmonary fibrosis.

3. Iterum Therapeutics plc (ITRM)

Iterum Therapeutics plc is a clinical-stage biotech company that focuses on developing innovative therapies for infectious diseases. The company’s lead product candidate is sulopenem, a novel oral and IV antibiotic for treating complicated urinary tract infections (cUTIs). Iterum is also developing sulopenem for the treatment of complicated intra-abdominal infections (cIAIs) and community-acquired bacterial pneumonia (CABP).

Investment Strategies for Biotech Penny Stocks

Investing in biotech penny stocks can be challenging due to their high volatility and regulatory risks. However, there are several investment strategies that investors can use to mitigate their risks and maximize their returns.

1. Research the company’s products and pipeline

Investors should conduct thorough research on the company’s products and pipeline to determine their potential for success. This includes analyzing the clinical trial data, regulatory approvals, and market potential of each product candidate.

2. Diversify your portfolio

Investors should diversify their portfolios byinvestingin several biotech penny stocks rather than putting all their money into one stock. This can help mitigate the risks of volatility and regulatory setbacks.

3. Monitor the news and industry trends

Investors should stay up-to-date with the latest news and trends in the biotech industry to identify potential opportunities and risks. This includes monitoring FDA approvals, clinical trial results, and competitor activity.

Conclusion

Biotech penny stocks can provide significant returns for investors who are willing to take the risk. However, these stocks come with high volatility and regulatory risks, making them a challenging investment. By researching the company’s products and pipeline, diversifying their portfolio, and monitoring the news and industry trends, investors can maximize their returns and mitigate their risks. Novan Inc., Bellerophon Therapeutics Inc., and Iterum Therapeutics plc are three biotech penny stocks worth watching in 2021 due to their innovative therapies and potential for growth.