2 Biotech Penny Stocks with a Strong Buy Consensus
The potential of penny stocks largely depends on the sector they operate in. When it comes to biotech companies, a therapy breakthrough not only helps the struggling patients but foresighted investors as well. When they achieve a Strong Buy rating, it’s time to take note.
New Year, New Hopes for the Future
The year started with the Democratic party finding itself in an unusually strong position. By controlling the White House and both chambers of Congress, Democrats have a mandate and the power to enact a broad range of policies. The last time a party held such power was in 2007, during the Republican President George W. Bush.
Some would say the Supreme Court majority should also be accounted for in this power equilibrium. However, it remains unclear if there is any distinction between SCOTUS judges being appointed by Democrats or Republicans. Nonetheless, for how long will this political capital last is anyone’s guess, but we do know what to expect from its effect on the economy:
- Accelerated fiscal spending accompanied by faster GDP growth.
- Higher inflation.
- Likely higher interest rates, although the Fed Chairman Powell hasn’t signaled this yet.
- More generous stimulus checks ($1400)
In such an environment of heightened investment optimism, penny stocks are ripe for the taking. As always, keep in mind that this is a risky venture, which is why you should take advantage of the best brokers for penny stock trading to minimize the risk. With that said, consider these two penny stock picks with a Strong Buy rating, courtesy of TipRanks’s database.
Penny Stocks with a Strong Buy Indication
1. ProQR (NASDAQ:PRQR)
Founded in 2012 by the current CEO Daniel de Boer, this biotech company is laser-focused on treating rare genetic diseases. Particularly, a cluster of genetic disorders resulting in impaired sight, also called inherited retinal diseases – IRDs. Because of their rarity, there are currently no treatments.
Although rare, IRDs represent a relatively large pool of patients. About 1 case in 1380 individuals can occur, which accounts for 5.5 million people worldwide. Does ProQR has what it takes to become the first company to provide an effective IRD treatment?
With five drugs under consideration, undergoing various trial stages, two have shown the most promise – QR-110 (Sepofarsen) and QR-421. The former is already in Phase 2/3. Similar to the current COVID vaccines, it represents an RNA therapy to neutralize the culprit for the Leber congenital amaurosis (near blindness) 10 (LCA10) – the CEP290 gene mutation.
The other promising drug, QR-421 deals with the USH2A gene mutation, which also causes blindness in addition to Usher syndrome (near deafness and blindness), currently in Phase ½. Both drugs show significant effectiveness/recovery potential alongside low safety risks, earning ProQR a projected $20 rise, or by 384% for one year.
2. AzurRx BioPharma (NASDAQ:AZRX)
Another small but talented biotech company, currently employing 10 biomedical engineers focusing their efforts on treating gastrointestinal (GI) diseases. AzurRx is using cutting edge recombinant GI therapies instead of adopting the traditional systemic approach.
They have three drugs undergoing testing, but their star candidate is MS1819. It has been developed for the treatment of exocrine pancreatic insufficiency, which should greatly benefit patients suffering from cystic fibrosis. Interestingly, it has been derived from a yeast strain to serve as a recombinant lipase (key in breaking down fats during digestion).
Currently in Phase 2 trial, the data has thus far encouraging, or as the Data Monitoring Committee (DMC) frame it “remains supportive of the program.” The Phase 2 should end by mid-year. On January 12th, AzurRX has announced partnership with fellow biotech company First Wave Bio.
The two have joined forced to explore Niclosamide as an effective immune checkpoint inhibitor-associated colitis (ICI-AC), including GI infections related to COVID-19. This represents a massive opportunity as this market is already reaching half a billion in value. Accordingly, based on MS1819 projection of sales by 2023, alongside Niclosamide, the company has been tagged with a $7 price target, signifying a possible rise of 608% during the year.
Penny stocks represent a long shot, but many current blue-chip stocks hail from that humble origin. Did you have any luck so far? Let us know in the comments below.