These days, you can’t buy a lot for five bucks. If you really want to get the most for your money, it’s worth looking at biotech stocks under $5. While technically penny stocks, there are a few companies that offer plenty of potential to run under the right circumstances. The problem is, there are dozens of biotech penny stocks out there. Finding one that’s under $5 that has a promising future ahead of it isn’t always easy.  

We’ve taken the legwork out of sifting through the bargain bin of biotechs. Here’s a look at six biotech stocks under $5 and why they’re worth a look. Keep in mind that not all of them are pure biotech plays, but all have strong exposure within the biotech sector. Here’s what to watch.

Best Biotech Stocks Under $5

1. Atossa Therapeutics Inc.

It’s rare to find a bargain bin biotech that’s active in late-stage trials. Atossa Therapeutics Inc. (Nasdaq: ATOS) is a clinical-stage biopharmaceutical company. Its current focus is on breast cancer and COVID-19—two of the most well-funded diseases in medicine today. 

The company’s COVID-19 symptom-reducing nasal spray moves into Stage 2 trials shortly, which could open up a new revenue stream. The big thing to keep an eye on for long-term success is Endoxifen: the company’s therapy to reduce mammographic breast density. It’s already in late-stage clinical testing, with strong initial results to pique investor curiosity. It’s one to watch as its trials come to fruition. 

2. Lineage Cell Therapeutics, Inc.

Lineage Cell Therapeutics, Inc. (NYSE: LCTX) focuses on developing novel cell therapies. The company’s immediate focus is a drug for age-related macular degeneration; however, it has a diverse profile of drugs in development. Its drug for nerve regeneration to treat neurological conditions is on to Stage 3 clinical trials. Meanwhile, its promising large-cell lung cancer drug is just coming out of Stage 1 trials. 

The company’s intriguing pipeline and 12-month grow trend have investors hitching their wagons to a small company that could get a whole lot bigger as it begins to produce meaningful results and marketable drugs. 

3. Agenus Inc.

Its focus on immunotherapy, including immuno-oncology, makes Agenus Inc. (Nasdaq: AGEN) part of a hot segment of the biotech industry right now. For a $600 million market cap, the company has a strong pipeline of single agent and combination therapies up and coming. Specifically, the company is testing immune modulating antibodies, Allogeneic iNKT cell therapy, cancer-preventing vaccines and adjuvants.

The diversity of Agenus Inc.’s pipeline is only part of its appeal. The staggered progression of these therapies could have investors seeing green for years to come if even a fraction of them come to market. Its partnerships with Gilead and Chinese pharma companies lends even more intrigue to its potential as a growth stock. 

4. Sesen Bio Inc.

In the market for a niche biotech stock under $5? Turn your attention to Sesen Bio Inc. (Nasdaq: SESN) and its focus on treatments for bladder cancer. Its Vicineum product recently completed Phase 3 clinical trial and is pending FDA approval. And while this is exciting, it’s not nearly as inspiring as the long-term potential of the company. 

If successful, Vicineum could pave the way for treating a wide range of cancers. It uses a novel fusion protein approach to disguise antibodies to target tumors, to selectively and broadly kill cancer cells. The stock price has already doubled in 2021, and it’s not out of the realm of possibility for it to double again before the end of the year. 

5. Spectrum Pharmaceuticals

With a primary focus in hematology and oncology, Spectrum Pharmaceuticals (Nasdaq: SPPI) is a great example of a stock the market forgot about. The company was a powerhouse in 2000, with shares trading for close to $600! If the stock can find its way to profitability again, there’s a strong runway ahead of it and a proven past behind it.  

How can it restore some of its former glory? Two drugs offer tremendous promise for the company. ROLONTIS® is a treatment for chemotherapy-induced neutropenia with the potential to improve quality of life for cancer patients. Poziotinib is a tyrosine kinase inhibitor (TKI) for the treatment of solid tumors. With Stage 2 and 3 trials in progress, Spectrum Pharmaceuticals could have a profitable drug out in the near future. 

6. VBI Vaccines

Vaccines are a hot topic right now, and VBI Vaccines (Nasdaq: VBIV) has profited from the situation. This immunology company has a pipeline with several promising preclinical vaccines, including broad coronavirus varieties. It’s also awaiting reporting from a Stage 3 trial of its Hepatitis B vaccine.

Vaccine funding and demand has reached a fever pitch. As demand for more effective vaccinations grows on the innovations discovered during COVID-19, the company could reap the benefits. With both prophylactic and therapeutic candidates in the mix, there’s ample opportunity for progress at VBI Vaccines.

Investing in Biotech Penny Stocks

From vaccines to stem cells, these companies may have different focuses, but they’re all part of a burgeoning sector. The biotech tailwinds caused by COVID-19 will blow strong for years to come. These biotech stocks under $5 may be a bargain right now, but they could very well double or triple in value, or even grow to become mid-cap companies in the coming years. If you’ve got a few unallocated dollars in your portfolio, this might be the place to put them to work. 

Please note that the market is always in flux. The securities listed above were recommended while trading at a share price of under $5, but may have since gained in value.

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