In this article we will take a look at the 10 best biotech stocks under $6 in 2021. You can skip our comprehensive analysis of the biotech industry and go directly to the 5 Best Biotech Stocks Under $6 in 2021.
The global biotechnology sector is expected to grow to more than $2.5 trillion by the end of this decade. The growth in the industry is expected to be driven by innovation, research, and new scientific discoveries. There is plenty of reason to be hopeful about the future of biotechnology, one of the core ones being the performance of the sector in 2020, a year ravaged by the worst pandemic in more than hundred years that took the lives of millions across the world. Even through the grim twelve months, the biotech sector exceeded market expectations.
In 2020, even as most biotech firms dedicated a large part of the year to finding a cure for the coronavirus, there were 53 new medicines approved by the US drug agency. This was the second-highest number of medicines approved in a single year. Some of the notable mentions in the new medicine list include Danyelza, a drug for pediatric neuroblastoma, developed by Y-mAbs Therapeutics, Inc. (NASDAQ: YMAB), and Trodelvy, a treatment for triple negative breast cancer, developed by Gilead Sciences, Inc. (NASDAQ: GILD).
Growth Catalysts for Biotech Stocks
Most biotechnology stocks hit all-time highs in 2020. The SPDR S&P Biotech ETF was up nearly 50% during the year, and other indices, like the NASDAQ Biotech Index, also saw double digits growth over the past twelve months, outperforming other sectors of the economy. In 2021, billions of dollars worth of money will be spent by governments across the world on biotech companies mass producing COVID-19 vaccines, like Moderna, Inc. (NASDAQ: MRNA), Pfizer Inc. (NYSE: PFE), and Johnson & Johnson (NYSE: JNJ).
The trends highlight that there is cause for concern as well. Medicine prices are skyrocketing and there are several world governments debating policies to lower the costs of drugs essential to survival of terminally ill patients. As environmental concerns overshadow nearly every top global summit, the biotech sector is increasingly expected to play a part to resolve issues like plastic waste dumps in the oceans and landfills that pollute fertile soil. It is estimated that 14 billion pounds of trash, most of it plastic, is dumped in the world’s oceans every year.
The biotech sector is also becoming a large industry that offers a lot of jobs and growth opportunities. For example, the life sciences industry in Florida alone supports more than 83,000 people. Another possible growth indicator is the breakthroughs being made in gene research. However, investors need to be wary of fraudulent practices as well. For those still seeking a way into the sector, cheap biotech stocks might be the answer. The case of Theranos CEO Elizabeth Holmes illustrates the perils of hedge fund driven high-risk investment strategies.
The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Number of Hedge Fund Holders: 4 Price as of April 19, 2021: $4.48 per share
MediciNova, Inc. (NASDAQ: MNOV) is a California-based biotech firm that develops novel therapeutics with a focus on neurology, respiratory, and liver diseases. The products that the company is developing include an oral anti-inflammatory and neuroprotective agent for treating neurological disorders and a selective beta-2-adrenergic receptor agonist for the treatment of acute exacerbations of asthma. MediciNova was founded in 2000 and is placed tenth on our list of 10 best biotech stocks under $6 in 2021.
At the end of the fourth quarter of 2020, 4 hedge funds in the database of Insider Monkey held stakes worth $2.4 million in the firm, down from 5 in the preceding quarter worth $2.2 million. In March, the firm had announced that it was shutting down research into the development of a COVID-19 vaccine so that it could concentrate on other drugs. The firm has also recently announced a partnership with Biomedical Advanced Research and Development Authority for a medical countermeasure against chlorine gas-induced lung damage.
Number of Hedge Fund Holders: 7 Price as of April 19, 2021: $4.47 per share
Voyager Therapeutics, Inc. (NASDAQ: VYGR) is a Massachusetts-based biotech firm that focuses on gene therapy and the development of treatments for patients suffering from severe neurological diseases. One of the products that the company offers is VY-AADC, an open-label trial drug for the treatment of Parkinson’s disease. It also drugs in the pipeline for the treatment of amyotrophic lateral sclerosis, Huntington’s disease, Friedreich’s ataxia; and tauopathies, including Alzheimer’s disease, progressive supranuclear palsy, and frontotemporal dementia.
Voyager has agreements in place with several universities and other drug firms for collaborative projects, including a partnership with Thermo Fisher Scientific and Fujifilm Diosynth Biotechnologies to support the development of gene therapy programs. Voyager was founded in 2013 and is placed ninth on our list of 10 best biotech stocks under $6 in 2021. Out of the hedge funds being tracked by Insider Monkey, New York-based Armistice Capital holds the most shares in the firm – 3.3 million – worth more than $24 million.
Number of Hedge Fund Holders: 6 Price as of April 19, 2021: $4.45 per share
OncoCyte Corporation (NASDAQ: OCX) is a California-based biotech firm that focuses on molecular diagnostics. The firm aims to provide products for the care of lung cancer patients. It also develops laboratory tests for the detection of cancer. One of the products that the company offers is named DetermaRx, a molecular test for early stage adenocarcinoma of the lung; and DetermaIO, a proprietary gene expression assay. The biotech firm was founded in 2009 and is placed eighth on our list of 10 best biotech stocks under $6 in 2021.
Earlier this month, the company announced that one of its drugs was showing correlation with immunotherapy responses in bladder cancer. The company said that the results added value to the findings of drug tests related to lung and breast cancers. Earlier this year, OncoCyte CEO Andrews Asbury bought shares worth more than $50,000 in the company. At the end of the fourth quarter of 2020, 6 hedge funds in the database of Insider Monkey held stakes worth $50 million in the firm, up from 5 in the preceding quarter worth $29 million. Neal C. Bradsher's Broadwood Capital is the biggest stakeholder in the company, with 14.7 million shares, worth $35.2 million.
Number of Hedge Fund Holders: 3 Price as of April 19, 2021: $4.47 per share
GeoVax Labs, Inc. (NASDAQ: GOVX) is a Georgia-based biotech firm that develops vaccines for infectious diseases and cancer. The firm was founded in 1988 with the aim of developing an effective vaccine against HIV-1 and has since expanded in scope. The firm is involved in the development of vaccines against COVID-19, human immunodeficiency virus (HIV); Zika virus; malaria; Ebola virus, Sudan virus, Marburgvirus, and Lassa virus, as well as therapeutic vaccines for HIV, chronic Hepatitis B infections, and solid tumor cancers.
It has collaborative agreements with many laboratories and medical institutes across the United States, including the National Institute of Allergy and Infectious Diseases of the National Institutes of Health; the HIV Vaccines Trial Network; and the Center for Disease Control and Prevention. Out of the hedge funds being tracked by Insider Monkey, New York-based Armistice Capital holds the most shares in the firm – 391,700 – worth more than $0.8 million. Sabby Capital was second on the list with 275,695 shares worth almost $0.3 million.
Number of Hedge Fund Holders: 14 Price as of April 19, 2021: $4.61 per share
BELLUS Health Inc. (NASDAQ: BLU) is a Canada-based company that develops medicines for the treatment of chronic cough and other hypersensitization disorders. One of the leading projects of the company is the drug BLU-5937, an oral small molecule antagonist of the P2X3 receptor, which is in Phase II clinical trial for treatment of chronic cough and chronic pruritus. The company has a market cap of more than $350 million and was founded in 1993.
In December, the firm announced that it had set up an at-the-market facility for the selling of company stock of an aggregate price of up to $50 million. In November 2020, investment advisory firm Evercore started coverage of BELLUS with an Outperform rating. Evercore set a $12 price target, almost double the average Wall Street target, on BELLUS stock with a 400% upside potential. At the end of the fourth quarter of 2020, 14 hedge funds in the database of Insider Monkey held stakes worth $62 million in the firm, up from 8 in the preceding quarter.
