The Best Pharmaceutical Penny Stocks of 2024

Stock investing spans a broad spectrum. At one end, you have large-cap company stocks with expensive portfolios. On the other hand, several smaller or penny stocks have high risk but substantial returns, especially for companies that make significant scientific discoveries. 

If you want to try your luck in penny stocks, consider investing in pharmaceutical companies, also known as biotech penny stocks. But in order to make the most of the moment, it is essential for you to know about the specific kind of pharmaceutical penny stocks to watch.

This post introduces you to the basics of investing in pharma stocks. Besides, we will tell you about the three best pharma penny stocks to invest in 2024.

Investing In Pharma Stocks -What You Need To Know

Investing in pharmaceutical stocks is a different ballgame. You will need to start by evaluating the following factors: 

• Pipeline strength- It refers to the number of drugs currently under development. The drugs listed ready for clinical listing are the ones that make a difference. The more diverse the pipeline, the higher the chance of returns.

• Track record: For any new drug, passing the FDA regulations is always challenging. So, always consider a biotech penny stock with a commendable track record.

• Research and Development Costs- A pharma company spends billions of dollars on a new drug from conceptualization to introduction. Hence, the R&D expense is a good indicator of financial stability. As a newbie investor, tracking company spending and acting accordingly makes sense. 

• Failure risks: Only a small percentage of drugs make it to the market. Clinical trials consider significant factors like safety, inefficiency, and other concerns. This, in turn, adds to the expense. So, watch out for pharma companies that are financially stable to absorb such shocks. 

• Patent lifespan: A drug patent generally lasts for around 20 years. After that, there’s room for generic producers to create competitive products. So, a pharma company heavily depends on the success of a single product. However, when the patent expires, they can face significant financial challenges. 

• Recall history: Despite FDA approval, there’s a good possibility of a drug being recalled. A good way to track such recall incidents is to check the FDA’s list of recalls. Generally, the stocks of such pharma companies gain a negative market reputation.

• Acquisitions and partnerships: Several established players in the pharmaceutical industry acquire smaller firms to even out the competition. So, they are financially stable and can be a good choice for investors. 

• Diversification: Penny stock investment should be diversified. This is because different pharma companies focus on various demographics and diseases. For an investor, diversifying your penny stock investment promises better returns.

Now, let’s look at the three best pharmaceutical penny stocks to invest in 2024. 

Wave Life Sciences (WVE)

Q3 Market capitalization: $544.408M

WVE is a genetic medicine company specializing in the design and optimization of cutting-edge stereo pure oligonucleotides. It helps in combating disorders that have fewer alternative treatment options. Thus, Wave Life uses several lead programs to address disorders like Alpha-1 antitrypsin deficiency, Duchenne muscular dystrophy, and Huntington’s disease.

Ardelyx (ARDX)

Q3 Market capitalization: $1.009B

Ardelyx is a US-based biopharmaceutical company. They uncover, advance, and introduce medicines to treat gastrointestinal and cardiorenal therapeutic areas. The company has a long line of ongoing research studies. Thus, it holds the potential for significant scientific breakthroughs.  

Cidara Therapeutics (CDTX)

Q3 Market capitalization: $97.788M

California-based Cidara Therapeutics is a biotechnology firm. They are focused on raising the care standards for individuals battling long-term diseases. They promise a comprehensive suite of solutions that revolves around innovative strategies. It takes a drift from conventional treatments. They aim at not only curing but also preventing diseases from happening. Both oncology and viral conditions remain top priorities. 

Take Time To Invest In Pharma Penny Stocks 

Penny stock investment is always subject to risks. That’s why you need to weigh the factors we discussed. This will make you an informed investor. When you anticipate the risks and act accordingly, penny stocks can be downright profitable.