Investing in biotech stocks under $5 can offer exciting opportunities for those willing to explore this high-risk, high-reward sector.
These stocks, often classified as penny stocks, provide investors access to innovative companies working on groundbreaking treatments for various diseases.
With the biotech industry’s rapid advancements, these stocks have the potential to deliver substantial returns. However, they also carry significant risk due to the speculative nature of clinical trials and regulatory approvals.
Investors interested in this space should conduct thorough research and consider the company’s pipeline, market cap, and potential for regulatory success.
Best Biotech Penny Stocks Under $5
PepGen Inc. (NASDAQ: PEPG)
PepGen Inc. (NASDAQ: PEPG) is trading at $1.54 per share as of May 16, 2025, with a market capitalization near $50.4 million.
The clinical‐stage biotech leverages its proprietary Enhanced Delivery Oligonucleotide (EDO) platform to advance novel oligonucleotide therapies, including PGN-EDODM1 for myotonic dystrophy type 1 (DM1) and PGN-EDO51 for Duchenne muscular dystrophy (DMD).
In Q1 2025, PepGen announced robust splicing correction of 29.1% at the 10 mg/kg dose in the FREEDOM-DM1 Phase 1 trial, following a single administration—far exceeding historical multi‐dose results—and reported a favorable emerging safety profile.
The FDA has granted Orphan Drug and Fast Track designations to PGN-EDODM1 for DM1, highlighting its potential to address a debilitating genetic disease with no approved treatments to date.
PepGen has paused its Phase II CONNECT2-EDO51 trial in DMD to review safety data from the ongoing CONNECT1 study but remains focused on its DM1 programs, with CONNECT1 cohort data expected in Q3 2025.
With a cash runway projected into late 2026, the company plans to launch its FREEDOM2-DM1 Phase 2 multiple ascending dose study later this year and advance additional pivotal trials—positioning PEPG as a high-upside biotech penny stock under $5.
Lineage Cell Therapeutics, Inc. (NYSEAMERICAN: LCTX)
Lineage Cell Therapeutics, Inc., is a pioneering company specializing in cell-based therapies and prescription therapeutics.
It is dedicated to advancing treatments for genetic and degenerative diseases, with a focus on age-related macular degeneration (AMD) and other high unmet medical needs.
The company’s commitment to innovation and strategic partnerships positions it as a key player in the biotechnology sector.
The collaboration with Roche Holding, a prominent Swiss healthcare giant, highlights Lineage’s potential for growth and market impact.
This partnership aims to further the development and commercialization of OpRegen, a promising pipeline candidate for AMD.
Such collaborations demonstrate the company’s ability to leverage its expertise and broaden its reach in the field of regenerative medicine.
Lineage’s diverse revenue streams, including licensing fees and research funding, provide a solid foundation for future growth.
The company’s focus on advancing its pipeline and achieving key clinical milestones offers investors an opportunity to participate in the potential upside of a biotechnology stock with strong growth prospects.
Geron Corporation (NASDAQ: GERN)
Geron Corporation is at the forefront of developing innovative cancer treatments targeting telomerase inhibition.
This approach aims to disrupt the underlying drivers of disease progression in hematologic myeloid malignancies and other genetic diseases.
Geron’s lead candidate, imetelstat, represents a groundbreaking therapy with the potential to transform cancer treatment outcomes.
Imetelstat’s ability to inhibit telomerase and extend the duration of its effects sets it apart in the competitive landscape of cancer therapeutics.
With recent FDA acceptance of its NDA for treating transfusion-dependent anemia, Geron is well-positioned to address high unmet medical needs in oncology.
The company’s focus on developing treatments for genetically defined diseases aligns with the growing demand for precision medicine.
Geron’s innovative approach and dedication to advancing cancer therapies may make it an appealing investment opportunity for those seeking exposure to biotechnology stocks with strong growth potential.
Northwest BioTherapeutics, Inc. (OTCMKTS: NWBO)
Northwest Biotherapeutics, Inc., is a biotech company specializing in developing immunotherapy products for cancer treatment.
Its proprietary DCVax technology platform aims to activate the immune system to fight cancer, offering a promising alternative to traditional therapies.
The company’s focus on creating cost-effective treatments without the toxicities associated with chemotherapies has garnered significant interest.
DCVax’s potential to improve patient outcomes in various cancers, including brain, prostate, and ovarian cancers, underscores Northwest Biotherapeutics’ commitment to addressing unmet medical needs.
Recent clinical trials have shown promising results, with a notable percentage of patients experiencing prolonged survival rates.
Investors interested in biotechnology stocks with a focus on innovative cancer treatments may find Northwest Biotherapeutics an intriguing choice.
The company’s dedication to advancing its pipeline and achieving regulatory approvals positions it as a potential leader in the field of immunotherapy.
iBio, Inc. (NYSEAMERICAN: IBIO)
iBio, Inc. (NASDAQ: IBIO) is trading around $0.80 per share as of May 19, 2025, with a market cap of roughly $75 million.
After years of preclinical work on IBIO-100 (an endostatin-Fc fusion for fibrotic diseases) with no new IND filings since January 2024, the company’s Q1 2025 10-Q confirms it will complete existing UT Southwestern studies and then re-assess whether to advance IBIO-100 further.
In the meantime, iBio has re-allocated its discovery engine toward a multi-target antibody collaboration with AstralBio, originally announced March 2024 to generate novel obesity and cardiometabolic therapeutics using iBio’s AI/ML platform.
As of April 2025, iBio amended that agreement to add a fifth cardiometabolic target, underlining its commitment to this partnership and deprioritizing standalone IBIO-100 work. With $50 million+ in cash runway into 2026, the company is now squarely focused on advancing AstralBio-derived antibodies toward IND-enabling studies.
More Top Biotech Stocks Under $5
Athersys, Inc. (NASDAQ: ATHXQ)
As of May 20, 2025, Athersys trades at $0.0065 per share on the OTC market under the ticker ATHXQ, with a 52-week range of $0.0116–$1.14.
Athersys’s flagship asset, MultiStem, is an allogeneic stem-cell therapy being evaluated in ischemic stroke (MASTERS-2 Phase IIb) and acute respiratory distress syndrome (ARDS) trials. The MASTERS-2 stroke readout is expected in Q3 2025, a pivotal catalyst for the stock.
In parallel, a BARDA-funded ARDS study reported positive safety data in January 2025, supporting further development.
Despite a modest market cap (~$10 million), Athersys secured a $20 million collaboration with Healios K.K. in cardiac repair, extending its runway into Q2 2026.
A positive MASTERS-2 result could re-rate ATHXQ above $0.05, offering substantial upside for risk-tolerant investors.
Aravive, Inc. (NASDAQ: ARAV)
Aravive’s shares are trading at $0.04 as of May 19, 2025, down from a 52-week high of $2.46.
The company’s lead candidate, AVB-500, is a decoy receptor targeting Gas6/AXL. Phase II monotherapy trials in platinum-resistant ovarian cancer and metastatic pancreatic cancer reported a 40% disease control rate in the ovarian cohort in March 2025.
Under a deal with Genentech signed in April 2025, Aravive received a $25 million upfront payment for rights to AVB-500 in hematologic malignancies. The company projects a cash runway into mid-2026.
A combination study of AVB-500 with checkpoint inhibitors is slated to start in Q4 2025, and a potential Phase III entry could occur in early 2026—key drivers for an ARAV re-rating above $0.10.
Entera Bio Ltd. (NASDAQ: ENTX)
Entera Bio is a biotechnology company pioneering the development of oral drug formulations to enhance the absorption of large molecules and biologics in the gastrointestinal tract.
Its lead candidate, EB613, is in clinical trials as a potential oral treatment for osteoporosis, a condition with significant unmet medical needs.
With a focus on innovative solutions, Entera Bio is carving out a niche in the biotechnology industry.
The company’s proprietary technology has demonstrated promising results, with EB613 showing dose-proportional changes in biochemical markers and increased bone mineral density in clinical trials.
As the first once-daily oral anabolic therapy for osteoporosis, EB613 addresses a critical gap in the current treatment landscape, offering investors exposure to a biotech stock with upside potential.
Entera Bio’s commitment to addressing unmet medical needs and its focus on developing novel therapies position it as a key player in the biotech sector.
With a market cap reflecting its potential for growth, Entera Bio offers investors the opportunity to invest in a company at the forefront of innovation in biotechnology.
As the company advances its clinical trials, it remains a biotech stock to watch closely. If you’re looking for biotech penny stocks with upside potential, Entera Bio Ltd. (NASDAQ: ENTX) is definitely worth considering.
ReWalk Robotics Ltd. (NASDAQ: LFWD)
ReWalk Robotics Ltd. is a medical device company focused on developing robotic exoskeletons to aid individuals with mobility impairments.
Specializing in innovative products that improve quality of life, ReWalk offers solutions for patients with spinal cord injuries and other mobility challenges.
The company’s advanced technology has garnered attention, positioning it as a leader in the field of wearable robotics.
ReWalk’s robotic exoskeletons are designed to enhance mobility and independence for users, offering a transformative impact on their daily lives.
With a commitment to innovation and research, ReWalk continues to develop cutting-edge solutions that address high unmet medical needs.
The company’s focus on improving patient outcomes could make it a compelling option for investors interested in biotech stocks with strong growth potential.
As ReWalk expands its product offerings and explores new opportunities in the medical device industry, it remains well-positioned to deliver value to its shareholders.
With a market cap that reflects its growth prospects, ReWalk Robotics may offer investors a unique opportunity to invest in a company dedicated to transforming lives through technology.
Verastem, Inc. (NASDAQ: VSTM)
Verastem, Inc., is a clinical stage biopharmaceutical company focused on developing treatments for cancer. With a pipeline of novel small-molecule drugs targeting critical signaling pathways, Verastem is at the forefront of cancer therapy innovation.
The company’s lead candidate, Avutometinib, is in Phase II clinical development for ovarian cancer, demonstrating its commitment to addressing unattended medical needs.
Verastem’s collaboration with GenFleet Therapeutics underscores its strategic approach to advancing cancer treatments.
The company’s strong balance sheet and focus on innovative therapies make it a biotech stock with significant growth potential.
As Verastem continues to develop its pipeline, it offers investors exposure to a company poised to deliver impactful cancer treatments.
With a focus on addressing medical needs and advancing clinical trials, Verastem is well-positioned for future growth in the biotech industry.
Investors seeking to invest in biotechnology stocks with a focus on oncology may find Verastem Oncology an attractive option.
What You Should Know About the Biotech Industry
Understanding the Biotech Industry
The biotech industry stands at the intersection of biology and technology, driving innovation even during economic downturns.
This sector thrives on breakthroughs in areas such as gene editing, personalized medicine, and regenerative therapies.
The rapid advancement of biotechnology has led to a surge in assets moving into clinical trials, with many companies focusing on important medical needs.
For instance, the biotech and pharmaceutical sectors have played a pivotal role in addressing the COVID-19 pandemic. With over 250 vaccine candidates and numerous medicines in development, these companies demonstrate the industry’s resilience and adaptability.
The Role of Clinical Trials and FDA Approvals
Biotech companies heavily rely on successful clinical trials and FDA approvals to drive stock prices.
These approvals can significantly impact a company’s market cap, with positive outcomes often leading to substantial gains.
Conversely, trial rejections can result in sharp declines in stock prices. Investors should pay close attention to clinical trial progress and regulatory updates to make informed investment decisions in biotech stocks under $5.
Should You Buy Biotech Stocks?
Investing in biotech stocks offers exposure to a rapidly growing industry with diverse applications. From cell therapy to biofuels and agriculture, biotech companies address critical challenges across various sectors.
However, investing in biotechnology stocks requires careful consideration of risk tolerance and market volatility.
Biotech stocks, particularly penny stocks, can be volatile due to their reliance on stock catalysts such as clinical trial results and FDA decisions.
Investors should only allocate funds they can afford to lose and conduct thorough due diligence before investing.
By understanding market trends and the unique characteristics of biotech companies, investors can identify hidden gems with strong growth potential.
Key Factors to Consider
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Company Pipeline: Evaluate the company’s pipeline for promising drug candidates and therapies in various stages of development. A broad pipeline with potential breakthroughs can indicate strong growth prospects.
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Regulatory Milestones: Monitor regulatory approvals and clinical trial advancements, as these are crucial drivers of stock price appreciation in the biotech sector.
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Partnerships and Collaborations: Assess strategic partnerships with larger pharmaceutical companies, as they can provide valuable resources and enhance a biotech company’s market position.
Where to Buy Biotech Penny Stocks
Investors can access biotech penny stocks through major exchanges such as the New York Stock Exchange and NASDAQ.
Online brokers like Robinhood and Webull offer commission-free trading, making it easier for investors to trade penny stocks and take advantage of market opportunities.
These platforms provide a range of tools and resources to help investors stay informed about market trends and make strategic investments.
In addition to traditional exchanges, some biotech stocks may be available for purchase over the counter (OTC).
While OTC stocks can offer unique opportunities, they may carry higher risks due to lower liquidity and less stringent regulatory requirements.
Investors should conduct thorough research and due diligence when considering OTC stocks as part of their investment strategy.
Biotech Stocks Under $5: Final Words
The biotechnology industry continues to evolve, offering investors new opportunities for growth and innovation.
As demand for biotech products rises, companies with strong pipelines and innovative approaches are well-positioned to capitalize on emerging trends.
Investors should remain vigilant, keeping an eye on market developments and conducting due diligence to identify the best biotech stocks under $5.
By leveraging the tools and resources available through platforms like Robinhood and Webull, investors can navigate the biotech sector and make informed decisions.
Whether seeking long-term growth or short-term gains, the biotech industry offers a wealth of opportunities for investors willing to embrace the challenges and rewards of this dynamic market.
Biotech Penny Stocks FAQ
Here are some of the most frequently asked questions online about biotech penny stocks.
What Is a Biotech Stock?
A biotech stock represents a share in a company that focuses on developing drugs and diagnostic technologies for treating diseases.
These companies often experience stock price growth as they achieve breakthroughs in research, secure financial grants, or form public-private partnerships.
Biotech stocks are a key part of the healthcare sector, offering potential investment opportunities with high growth prospects.
Is It Good to Invest in Biotech?
Investing in biotech stocks can be a rewarding opportunity for those looking for exposure to innovation in healthcare.
The biotech industry is known for its potential for significant returns, especially when companies achieve positive clinical trial results or receive regulatory approvals.
However, it is crucial to stay informed about the latest developments, as stock prices can be volatile and influenced by market trends and company-specific news.
What Is the Best Biotech Stock to Buy Right Now?
Identifying the best biotech stocks to buy involves thorough research and consideration of various factors. Wall Street analysts often provide insights into stocks with strong growth potential and price target.
Investors should consider companies with promising pipelines, solid financials, and positive analyst ratings. Keep an eye on biotech stocks that are developing treatments for unmet medical needs or have received recent regulatory approvals.
Why Are Biotechnology Stocks Falling?
Biotechnology stocks can experience price fluctuations due to various reasons, including clinical trial outcomes, regulatory decisions, and market conditions.
Stock prices may fall if a company faces setbacks in its drug development process or receives unfavorable regulatory news.
Additionally, broader market trends and investor sentiment can impact the performance of biotech stocks. It’s essential for investors to conduct due diligence and assess the fair value of stocks before making investment decisions.
Is Biotech the Next Big Thing in the Stock Market?
The biotech industry continues to be a focal point for innovation, with companies working on cutting-edge treatments for chronic diseases, cancer, and other health conditions.
As research advances and new therapies are developed, the potential for biotech stocks to drive significant stock market growth remains high.
Investors interested in biotech should monitor developments in gene editing, personalized medicine, and regenerative therapies, as these areas offer substantial upside potential.
How Do I Evaluate a Biotech Stock’s Fair Value?
Evaluating a biotech stock’s fair value involves analyzing various factors, including the company’s pipeline, financial health, market cap, and competitive position.
Investors should review clinical trial progress, potential market size for approved drugs, and partnerships with larger pharmaceutical companies.
A stock market analyst report or price target could provide additional insights into a stock’s potential value. Due diligence is crucial to making informed investment decisions in the biotech sector.
What Are Some Risks Associated With Investing in Biotech Penny Stocks?
Investing in biotech penny stocks carries significant risk due to the inherent uncertainty in drug development and regulatory processes.
These stocks can be highly volatile, and investors may face losses if clinical trials fail or regulatory approvals are denied.
It’s important for investors to diversify their portfolios, assess their risk tolerance, and stay informed about market conditions to navigate the challenges of investing in biotech penny stocks.
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