7 Biotech Penny Stocks to Buy


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3 Breakout Stocks Under $5

Biotech stocks are on the rise right now for many reasons. I recently wrote about the coming shift out of bonds and into stocks , and how this is lifting many small cap companies. It's worth noting that healthcare should continue booming whether prices are inflating or deflating and whether it's a bull market or a bear market.

If you want to maximize profit potential in 2011, consider adding some of my top biotech penny stocks to your portfolio. These are not literally penny stocks, as they each trade for a few dollars instead of a few cents. But the fact that these are small-cap companies with cheap shares makes them ripe investments to snatch up now that momentum is on their side.

Here are my top seven penny stock biotech picks now:

#1 - Array BioPharma Inc. ( ARRY )

3 Breakout Stocks Under $5

Array BioPharma Inc. (NASDAQ: ARRY ) discovers, develops and commercializes small molecule drugs for patients with cancer and inflammatory diseases. Both areas are huge growth industries as cancer and arthritis remain common ailments for older Americans. Over the past 12 months, ARRY stock has jumped 65% compared with gains of about 29% and 9.1% for the NASDAQ and Dow Jones, respectively. Granted a lot of this surge came in December 2009, but more recently, this stock has gained 23% since the start of September so clearly AARY has a lot left to offer. Additionally, in its last income statement Array posted quarterly revenue growth of 134.6% year-over-year.

#2 - Inhibitex Inc. ( INHX )

3 Breakout Stocks Under $5

Biopharmaceutical company Inhibitex Inc . (NASDAQ: INHX ) focuses on the development of products to prevent and treat serious infections. This is a crucial part of reducing health care costs, because beating an infection early can save other costly treatments as well as preserving patient health. Since last December, this penny stock is up an incredible 250%, compared with much smaller gains by the broader markets. INHX has also been very successful over the past several months, doubling since Sept. 1. Inhibitex just surged to a new 52-week high Monday but has rolled back a bit so it could be a buying opportunity this week.

#3 - SciClone Pharmaceuticals ( SCLN )

3 Breakout Stocks Under $5

SciClone Pharmaceuticals (NASDAQ: SCLN ) is a biopharmaceutical company that has a product portfolio specializing in therapies for cancer and infectious diseases. Over the past 12 months, this stock has jumped +81%. More recently, this stock has gained 70% since mid-August. This penny stock has also outperformed earnings estimates for four consecutive quarters. Shares have consolidated after a report that SciClone will no longer be pursuing an experimental hepatitis drug, but my screens still rate SCLN stock strongly because of big buying pressure and good fundamentals.

#4 - Keryx Biopharmaceuticals ( KERX )

3 Breakout Stocks Under $5

Keryx Biopharmaceuticals (NASDAQ: KERX) acquires and develops treatments for life-threatening diseases, including cancer and renal disease. Year-to-date, this biopharmaceutical stock has climbed nearly 90%, compared to about 10% gains by the Dow and S&P 500. This stock is also 35% since the start of September. Trading at around $4.70, KERX has yet to revisit its May highs of around $6 a share. But with an average Wall Street price target of $8 and a high target of $10, we could see a lot more from Keryx in 2011.

#5 - Idenix Pharmaceuticals Inc. ( IDIX )

3 Breakout Stocks Under $5

Operating in the United States and Canada, Idenix Pharmaceuticals Inc. (NASDAQ: IDIX ) discovers and develops drugs for human viral diseases. In the last 52-weeks, this penny stock has gained 116%, and IDIX is up 56.5% over the past 3 months. Shareholders are also excited by the fact that IDIX posted a quarterly revenue growth of 21.9%, year-over-year, in its last income statement. IDIX is priced at $4.57 with a 52-week range of $2.02 to $6.11.

#6 - Ariad Pharmaceuticals Inc. (ARIA)

3 Breakout Stocks Under $5

Ariad Pharmaceuticals (NASDAQ: ARIA ) discovers and develops drugs for treating diseases at the cellular level, a truly high-tech approach to modern medicine. Year-to-date, ARIA stock has nearly doubled, compared with much smaller gains by the broader markets. Like others on this list, ARIA has seen steady growth since September, up 27% in that time. This penny stock trades at around $4.45, not far from its 52-week high of $4.71. With an average target of $6 and a high of $7, a new high could be just the beginning of success for ARIA stock in the near future.

#7 - Opko Health (OPK)

3 Breakout Stocks Under $5

Specialty pharmaceutical company Opko Health Inc. (AMEX: OPK ) is focused on vaccines, diagnostic technologies, imaging systems and pharmaceutical products that are largely preventative in nature. This is not only an effective way to keep healthcare costs down for institutions, but a profitable niche for Opko. Since last December, this penny stock has more than doubled, and it has gained about 70% since the start of September. Impressively, Opko posted quarterly revenue growth of 406% year-over-year in its last income statement. That's growth you can take to the bank.

As of this writing, Louis Navellier did not own a position in any of the stocks named here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
More Headlines for: ARRY , IDIX , INHX , KERX , SCLN

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Louis Navellier

Louis Navellier

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