When it comes to penny stocks, there are plenty of different catalysts to consider. You could look for general market trends or sector/industry-based themes. However, these are more along the line of technical catalysts. On the other hand, you could also look for more fundamental catalysts. These would be things like corporate filings, analyst ratings, and, of course, press releases.
Penny stock news is a big point of focus for small-cap traders. This sets a general starting point for traders to begin researching other things about a company. I know that this can lead you down “the rabbit hole,” sifting through more information than you probably need. However, understanding why stocks are moving and what news means for a company can help you find penny stocks to buy or even ones to avoid.
This month, there’s no shortage of penny stocks with news. There’s also no shortage of market volatility to drive momentum in certain stocks. While many traders are focusing more on the “reopening trade,” one industry has continued staying the course, so to speak. Biotech and healthcare remain a center point for many traders.
The idea that these companies are working on novel treatments and breakthrough therapies set the stage for speculation to be a driving force. With that, however, also comes many different news events to act as catalysts along the way. In this case, we’re going to look at a few health-related companies, all seeing increased activity following their latest updates.Biotech Penny Stocks To Watch
- PharmaDrug Inc. (OTC: LMLLF) (CSE: BUZZ)
- Iterum Therapeutics Plc. (NASDAQ: ITRM)
- Neos Therapeutics Inc. (NASDAQ: NEOS)
When you think about biotech, the first thing that might come to mind are labs designed for developing cancer treatments or vaccines. But have you thought about how this market niche has evolved over the last few years? With the inclusion of things like “natural medicines,” we’ve seen everything from cannabis to psychedelics being explored by companies. In this case, PharmaDrug is concentrating on both.
Specific to the pharmaceutical market potential of alternative medicines, the studies focusing on psychedelics primarily target mental health concerns. We’re talking about a market (central nervous system therapeutics) worth nearly $205 billion by 2028. While the “cannabis play” for PharmaDrug focuses on the German market, its advancement in R&D for psychedelics is getting much more attention. Furthermore, the company isn’t “just another mushroom stock.” It’s targeting the use of N, N-Dimethyltryptamine, better known as DMT, in treating certain neuropsychiatric and neurological disorders.PharmaDrug In The News
This week the company announced entry into a sponsored research agreement with the University of Michigan. They will evaluate whether DMT plays a potential role in normal, diseased, and altered states of consciousness in a newly created animal model. PharmaDrug explained that the objective is developing novel therapeutic strategies of DMT for clinical unmet medical needs currently not addressed by DMT.
Daniel Cohen, CEO of PharmaDrug. “Our research collaboration with the University of Michigan and its commitment on consciousness science is essential to our psychedelic pharmaceutical strategy of creating a unique portfolio of DMT therapies targeting rare disorders while also focusing on foundational research with DMT to explore and evaluate its therapeutic potential across all physiological areas of the human body.”
With this latest update, PharmaDrug has further solidified its directive in pursuing another facet of the psychedelic niche, which appears to be one that industry peers have not overly pursued.#2: Iterum Therapeutics Plc.
Iterum Therapeutics isn’t a psychedelic stock, but it has recently been one of the biotechs to watch. Shares have steadily crept up in 2020 as ITRM has maintained a trend in lockstep with its 50-day moving average. The company has placed its focus on developing oral and IV antibiotics treating infections caused by numerous pathogens.
Last month Iterum raised $35 million to put to work in its pipeline. Specifically, the funds were earmarked for supporting the review of its New Drug Application to treat uncomplicated urinary tract infections in patients with a quinolone non-susceptible pathogen. Funds are also slated for pre-commercialization and potential launch activities for its oral sulopenem, as well as continued clinical development of sulopenem in additional indications.Iterum In The News
This week Iterum made headlines after announcing changes in the makeup of its Board. In particular, the company appointed Beth P. Hecht to replace Patrick Heron. Hecht will also serve as a member of the Audit Committee and Compensation Committee of the Board.
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Her expertise comes in the form of corporate governance success. Previous & current endeavors include being the SVP of Xeris Pharmaceuticals (NASDAQ: XERS), serving as a member of the Board of Neos Therapeutics, and heading up HR & legal at numerous companies.
Corey Fishman, Chief Executive Officer of Iterum Therapeutics plc, said, “As Iterum transitions from a development company to a commercial organization, we are looking forward to leveraging Beth’s diverse pharmaceutical experiences and collaborating with us to shape our strategic plans and advance our vision.”#3: Neos Therapeutics Inc.
Yes, this is the same Neos mentioned above, and it has also been making moves after recent developments. Neos is a commercial-stage pharmaceuticals company. It focuses on developing central nervous system products and has been on the watchlist ever since announcing a proposed merger with Aytu BioScience (NASDAQ: AYTU) in December. Through the deal, the companies would combine and form AytuBiopharma Inc., trading under the AYTU symbol.
Neos’s portfolio of drugs includes treatments for attention-deficit hyperactivity disorder. Aytu’s targets indications for pediatric allergy and vitamin deficiency portfolio. Wit this, Aytu Biopharma will take aim at pediatric medicine.Neos In The News
Last week, two independent proxy advisory firms, ISS and Glass Lewis, recommended shareholders approve the merger.
“For Neos shareholders, the transaction would also provide an opportunity to participate in a combined company with a stronger financial profile and balance sheet than Neos on a stand-alone basis,” Neos cited Glass Lewis saying in its report. “Broadly speaking, we see no cause for significant concern with the strategic rationale for the proposed transaction and expect shareholders of both companies could benefit from the combination.”
With this transaction valued at roughly $44.9 million and the proxy meeting date being this week (March 18th), these developments could be ones to keep in mind if NEOS is on your watch list right now.