10 Best Biotech Stocks Under $5 in 2022

Biotech stocks under $5 may be a steal right now, but they might easily double or triple in value in the coming years, or even expand to become mid-cap firms. If you have a few dollars in your portfolio that haven't been allocated, here could be the place to put them to work.

Intro

In 1973, scientists exploited recombination to genetically design an antibiotic-resistant strain of Escherichia coli bacteria, which ushered in modern biotechnology. In 1976, Genentech, the first publicly-owned biotech business, was founded as a result of this revolution in molecular synthesis. Genentech, like many other biotech companies today, began as a research project with no commercial products. It was, however, able to develop human-derived insulin that significantly improved the drug's therapeutic efficacy.

Genentech's founders started with a $1,729 investment. They went public in 1980, generating $35 million. Roche paid $46.3 billion for Genentech in 2009.

Since 1993, investors have taken biotechnology seriously as a unique market area. That year, the Biotechnology Innovation Organization (BIO) was founded, and it is today the world's largest biotech trade organization. BIO has spent millions of dollars advocating for small company inclusion and intellectual property rights in the United States. Many of the challenges they solve are directly related to small-cap and penny stocks, allowing startups to conduct speculative R&D while keeping the results of their research.

Building something from nothing and offering the little guy a chance to alter the world is at the heart of biotech's history. It is ideal for speculative investors looking to strike a home run in the stock market.

The biotech industry, like penny stocks, is famously volatile. When you put the two together, you've got a recipe for making headlines. However, if you're looking for  biotech stocks under $5  with endless possibilities, this is the place to be.

What Are Biotech Penny Stocks?

Biotechnology combines natural science with engineering. Scientists can use manufactured engineering concepts to modify and improve biological organisms, creatures, molecules, and more. It allows them to use them in a variety of products and services.

While biotechnology is a relatively new field of study, its concepts have been employed for millennia. Biotechnology has been used in agriculture, animal breeding, and brewing in the past. These strategies apply engineering ideas and methodologies to modify naturally existing elements for human use.

Biotechnology has significantly progressed over time, and it is now the most important science in the development of health, agriculture, food, and a range of other businesses.

A notable example of biotechnology in medicine is the creation of synthetically synthesized insulin for human use in 1978. Previously, animals were the main source of insulin, but this was no longer the case. Scientists employed biotechnology to create genetically modified bacteria that can produce enormous amounts of compounds quickly. It has significantly reduced the cost and time required to manufacture insulin.

You can't get anything for five dollars these days. It's worth checking into biotech stocks under $5 if you really want to get the most bang for your buck. While technically penny stocks, a few companies have a lot of upside potential if the right conditions are met. The issue is that there is a slew of biotech penny stocks to choose from. It's not always simple to find one for under $5 that has a bright future ahead of it.

We've done the labor for you by searching through the biotech bargain bin. Here are seven biotech stocks under $5 and why they're worth investigating. Take note not all of them are pure biotech plays, but they all have a lot of biotech exposure.

10 Best Biotech Stocks Under $5

1. electroCore (NASDAQ: ECOR)

electroCoreInc is a neurology-focused commercial-stage bioelectronic medicine company offering a non-invasive vagus nerve stimulation therapeutic technology. 

The FDA has approved the company's product gammaCore for adjunctive use in the prevention of cluster headaches in adults, the acute treatment of pain associated with episodic cluster headaches in adults, the treatment of acute discomfort caused by migraine headaches in adults, and the prevention of migraine in adults in the United States. 

In the European Union, the gammaCore has received CE approval for the acute Treatment of primary headache, bronchoconstriction, and drug overuse headache in adults as a preventative measure.

2. Seelos Therapeutics (NASDAQ: SEEL)

Seelos Therapeutics Inc is a biotechnology business in the early stages of development. The company's primary emphasis is on developing treatments that address large unmet needs in CNS diseases and other uncommon conditions.

3. American Shared Hospital (AMEX: AMS)

American Shared Hospital Services is a healthcare corporation with a 30-year track record of supplying hospitals and medical institutions with cutting-edge medical equipment. Gamma Knife, intensity-modulated radiation therapy, and proton beam radiation therapy are some of the company's products.

The biotech stock's market capitalization is $10 million.It has a daily volume of trading of about 36,000 shares. In 2019, American Shared Hospital Services had a $20 million profit.

4. VBI Vaccines

Vaccines are currently a popular topic, and VBI Vaccines (Nasdaq: VBIV) have benefited from it. This immunology firm has numerous promising preclinical vaccines in its pipeline, including wide coronavirus variants. It's also waiting for a Hepatitis B vaccination Stage 3 trial results.

Vaccine funding and demand are at an all-time high. The company may benefit as demand for more effective vaccinations develops as a result of the advancements discovered at COVID-19. There's plenty of room for progress at VBI Vaccines, with both preventive and therapeutic possibilities in the mix.

5. Brickell Biotech (NASDAQ: BBI)

Brickell Biotech Inc is a clinical-stage pharmaceutical firm established in the United States that focuses on developing therapies for the treatment of skin conditions. Hyperhidrosis, Cutaneous T-cell lymphoma, Psoriasis therapies and other common severe skin illnesses are in the pipeline. Sofpironium Bromide, BBI-3000, and BBI-6000 are among the company's pipeline products.

6. Atossa Therapeutics Inc.

It's uncommon to come across low-cost biotech that's now in late-stage testing. Atossa Therapeutics Inc. (Nasdaq: ATOS) is a biopharmaceutical business in clinical development. Its current focus is on breast cancer and COVID-19, two of medicine's most well-funded disorders.

COVID-19, the company's symptom-relieving nasal spray, is about to enter Stage 2 trials, which might open up a new revenue source. Endoxifen, the company's medication for reducing mammographic breast density, is the big thing to keep an eye on for long-term success. It's already in late-stage clinical trials, with promising preliminary results that have piqued investor interest. It'll be interesting to see how its trials play out.

7. Lineage Cell Therapeutics, Inc.

Lineage Cell Therapeutics, Inc. (NYSE: LCTX) is a company that specializes in the development of new cell therapies. The company's immediate focus is on medicine to treat age-related macular degeneration, but it is working on a wide range of drugs. Its nerve regeneration medication is in the third round of clinical trials to treat neurological diseases. Meanwhile, the company's potential large-cell lung cancer medication is still in Phase 1 testing.

Investors are tying their wagons to a little company that might grow a lot bigger when it begins to produce substantial results and commercial pharmaceuticals, thanks to its fascinating pipeline and 12-month growth trajectory.

8. Agenus Inc.

Agenus Inc. (Nasdaq: AGEN) is part of a hot section of the biotech business right now because of its focus on immunotherapy, especially immuno-oncology. The company has a robust pipeline of single-agent and combination medicines up and coming for a $600 million market cap. Immune modulating antibodies, allogeneic iNKT cell treatment, cancer-prevention vaccinations, and adjuvants are among the products being tested by the company.

The pipeline diversity of Agenus Inc. is merely one aspect of its attraction. If even a portion of these medications makes it to market, the staggering evolution of these therapies might keep investors happy for years. Its collaborations with Gilead and Chinese pharmaceutical businesses add to the stock's appeal as a growth stock.

9. Sesen Bio Inc.

Are you looking for a specialized biotech stock that is under $5? Take a look at Sesen Bio Inc. (Nasdaq: SESN), which focuses on bladder cancer treatments. Vicineum, one of the company's products, just completed a Phase 3 clinical trial and is awaiting FDA approval.And while this is exciting; it pales in comparison to the company's long-term potential.

Vicineum, if successful, might pave the door for the treatment of a wide range of malignancies. It employs a unique fusion protein technique to camouflage antibodies that target tumors and kill cancer cells selectively and broadly. The stock price already doubled in 2021, and it's not out of the question that it may double again before the year's end.

10. Spectrum Pharmaceuticals

Spectrum Pharmaceuticals (Nasdaq: SPPI), specializing in hematology and oncology, is a perfect example of a stock that the market overlooked. In 2000, the corporation was a force to be reckoned with, with shares fetching close to $600 per share! If the stock can return to profitability, it has a long runway ahead of it and a track record to back it up.

What steps can it take to reclaim some of its previous glory? For the corporation, two medications hold a lot of promise. ROLONTIS® is a chemotherapy-induced neutropenia medication that has the potential to improve cancer patients' quality of life. Poziotinib is a type of tyrosine kinase inhibitor used to treat solid cancers. Spectrum Pharmaceuticals could have a good medicine out in the near future, thanks to ongoing Stage 2 and 3 trials.

Why Invest in Biotech Penny Stocks Now?

Covid-19's massive impact drew the attention of a broader set of investors to biotech penny stocks. Those who suffered from FOMO during the initial bull run can now profit from some of the market's froth dissipating.

The sector's high price volatility is also less of a problem, at least in relative terms, because some of the market's behemoths are seeing penny stock-like price swings. Even large-capitalization are currently offering little security, as evidenced by the 26 percent drop in Meta Platforms (previously Facebook) after the company reported disappointing Q4 2021 earnings.

These companies may specialize in diverse areas, such as vaccines or stem cells, but they're all part of a growing industry. COVID-19's biotech tailwinds will continue to blow for years to come. These biotech stocks under $5 may be a steal right now, but they might easily double or triple in value in the future years or perhaps expand to become mid-cap firms. If you have a few dollars in your portfolio that haven't been allocated, here could be the place to put them to work.

Please keep in mind that the market is constantly changing. The stocks listed above were recommended while they were trading for less than $5 a share, but their value may have since increased.

What You Should Know Before Investing in Biotech Penny Stocks?

The price swings in biotech penny stocks can be dramatic is an understatement. Volatility at the level of 25% intraday price movements is not uncommon, and this attracts day traders and speculators, giving the markets an even more Wild-West character.

Investors in biotech penny stocks under $5 must decide whether they want to cash in on short-term gains or hold on to their assets for a 'home run' return. It can result in a more significant requirement to stay current on market and business news. At the same time, automated price alert solutions provided by excellent brokers can help automate the process to some extent.

New opportunities emerge every day in biotech, especially when micro-companies compete to be the next media darling. We'll concentrate on organizations that have made a name for themselves in the penny stock market. Don't worry; all of these options still have a lot of room for growth (and plenty of risks, too).

How to Buy Biotech Stocks? 

The first step in investing in an exciting and high-risk return market is to choose the perfect biotech penny stock for under $5. Market risk, or the possibility that the price will go against you, is inherent, but other risks are more manageable, such as selecting a reliable broker like Top1 Markets and successfully managing trades.

1. Choose a Broker

This Broker shortlist comprises companies with a history of offering penny stock markets and giving clients the resources they'll need to succeed as traders. Tier-1 financial authorities regulate them as well, including Tier-1 Regulators.

• The Securities and Exchange Commission (SEC) of the United States

• The Financial Conduct Authority (FCA) of the United Kingdom

• The United Kingdom's Australian Securities and Investments Commission (ASIC)

• The Cyprus Securities and Exchange Commission of the United Kingdom (CySEC)

2. Open and Fund an Account

It takes minutes to set up an account, and it's similar to setting up an online bank account. Clients must submit enough personal information to ensure that they, and only they, have access to the new account. It can even be done utilizing mobile devices.

Credit cards, debit cards, bank transfers, and ePayment providers can all be used to deposit funds into the broker account. Checking the terms and conditions can help you avoid paying high administration costs, but due to the fierce rivalry among platforms, most aim to keep these types of fees to a minimum.

3. Open an Order Ticket and Set Your Position Size

The next step is to purchase the biotech stocks you've targeted once the funds have been validated in your new account. You may get the trading dashboard for each stock using the search option or searching by sector.

Price charts, research reports, and news updates enable you to double-check your trade before putting the number of shares you wish to purchase into the appropriate data form and clicking or tapping 'buy.'

4. Set Your Stops & Limits

Risk management tactics include Stop Loss and Take Profit orders provided by brokers. Both of these are built-in system instructions that tell your Broker to close out part or all of a trade if the price hits a specified level. Take profit orders to crystallize winnings while stopping losses and minimizing losses on losing transactions.

Buy-and-hold investors with long-term objectives frequently ignore stopping loss and taking profit orders. Short-term price volatility is a natural part of the market and might cause positions to be automatically closed out due to 'noise.'

Trading in modest increments and constructing a diversified portfolio is an alternative strategy to risk management. It can help take the passion out of trading, smooth out returns, and allow investors to stay in profitable positions.

5. Make Your Purchase

When you click or tap 'purchase,' some of the money in your account will be converted into a stock position. The value of this position can be tracked by going to the Broker's website's Portfolio area, where actual market prices will determine it.

Final Thoughts

Biotech stocks offer a distinct risk-reward profile, whether you're an experienced investor or a total novice. They're an intriguing prospect but not one on which most investors would put their money down. Having a clear plan and controlling risk can help you tip the odds in your favor, as can choosing a reputable broker with the features you need. Free research and price alert messages are provided by good brokers, putting you in the ideal position to get started and book your first trade.