Stock Market

Biotech stocks are always interesting from a trading perspective. With dozens of companies in the clinical-stage, positive news from trials can be a big catalyst for a scintillating rally. Biotech stocks were however subdued in a post-pandemic world with focus shifting to other sectors. This has translated into undervalued in several interesting biotech stocks under $10.

An important point to note is that clinical-stage biotech stocks are participants in a meme stock rally. With multiple rate cuts likely in the next 12 months, biotech stocks can be in the thick of action. It therefore makes sense to hold some stocks from the sector for quick gains.

This column focuses on three biotech stocks under $10 that have impending catalysts. In most cases, the catalyst related to trial outcomes that set stage for commercialization of a molecular entity. Besides the meme frenzy, let’s discuss the fundamental reasons to be bullish on these ideas.

Biotech Stocks Under $10: Actinium Pharmaceuticals (ATNM)

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Actinium Pharmaceuticals (NYSE:ATNM) stock has remained sideways in the last 12 months. I see this consolidation as a good opportunity to accumulate before the biotech stock skyrockets.

As an overview, Actinium is a clinical-stage biopharma company that’s focused on developing targeted radiotherapies. It’s worth noting that the company’s Iomab-B candidate is in the late-stage (Phase three) clinical trials.

Also, the biopharma player has reported positive results from pivotal phase three SIERRA trials. With planned regulatory filings, there is a strong reason to believe that ATNM will surge higher. Besides this, Actinium has a deep product pipeline that sets stage for long term value creation.

Another important point to note is that the biopharma company has a cash buffer of $84 million. The cash buffer is expected to fund operations into the second half of 2026. Therefore, the pipeline development will continue to advance and Actimab-A, the second most advanced product candidate, will add to the positive catalysts.

Adicet Bio (ACET)

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Adicet Bio (NASDAQ:ACET) is a high-risk biotech stock that’s worth considering after a 75% plunge in the last 12 months. The clinical-stage biotechnology company is involved in the development of allogeneic gamma delta T cell therapies for autoimmune diseases and cancer.

Last week, Adicet received fast track designation from the U.S. Food and Drug Administration for ADI-001. The candidate is for the potential treatment of “relapsed/refractory class III or class IV lupus nephritis.” This is a major catalyst for ACET stock upside as it will help in expediting the drug review.

It’s worth noting that in March, the company closed a $98 million public follow-on offering. Equity dilution is one of the reasons for the sharp correction in ACET stock. However, with the fast-track designation, the company has ample flexibility to finance R&D.

Additionally, Adicet is building a pipeline with clinical updates due in the second half of 2024 and 2025. The price-action is therefore likely to remain positive with the projected cash runway into the second half of 2026.

Entera Bio (ENTX)

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Entera Bio (NASDAQ:ENTX) stock had touched highs of $3.35 in April. A sharp correction followed and ENTX currently trades at $2. I see this as a good opportunity to accumulate for a fresh rally in the coming quarters.

As an overview, Entera Bio is a clinical-stage biotech company focused on the development and commercialization of orally delivered peptide and protein therapeutics. Currently, the company’s most advanced product candidates, EB613, is for the treatment of high risk, post-menopausal osteoporosis. Further, EB612 for the treatment of hypoparathyroidism and is in the first phase of clinical trials.

An important point to note is that EB613 (phase three being initiated) can be a potential blockbuster candidate. Globally, osteoporosis impacts 200 million women and no new osteoporosis therapy has been approved since 2019.

From a financial perspective, Entera Bio has cash runway through the first half of 2025. Therefore, there are no immediate equity dilution concerns. Further, with multiple programs expected to enter clinical stage in 2025, the outlook is positive for ENTX stock even if there is dilution of equity next year.

On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.

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