We recently compiled a list of the 10 Best Biotech Penny Stocks to Buy Now. In this article, we are going to take a look at where Inozyme Pharma, Inc. (NASDAQ:INZY) stands against the other biotech penny stocks.
Biotech Stocks in 2024: Growth Prospects, Key Players, and Investment Opportunities
In 2024, the healthcare industry has been doing well, encouraging investors to look into new and exciting opportunities. Particularly biotech is anticipated to profit, despite the dangers of continuous mergers and acquisitions. Traders ought to exercise caution. With an 11.8% CAGR, the worldwide biotechnology market is expected to reach USD 4.25 trillion by 2033. It is expanding quickly. The U.S. market is projected to increase at an 11.90% CAGR to reach USD 763.82 billion by 2033 from its 2023 valuation of USD 246.18 billion. In 2023, the U.S. led North America in terms of revenue share.
Fitch Ratings maintains a Neutral outlook for the global biotech industry in 2024. Its primary motivation to do so is the moderating inflationary rates. The industry is supported by factors such as a growing aging population, increased healthcare access, and a rise in chronic and specialist conditions. Fitch also forecasts a heightened focus on drug pricing and patient value.
Biotech equities including Vincerx Pharma (VINC), Corbus Pharmaceuticals (CRBP), and Viking Therapeutics (VKTX) have seen significant gains in 2024, with returns ranging from 134% to 446%, despite receiving less media attention than industries like technology and cryptocurrencies. Positive weight loss drug trial findings, for example, let Viking Therapeutics connect its product with a potentially billion-dollar market need. Although the success of individual stocks indicates prospective gains, larger indexes such as the NASDAQ Biotechnology PR USD Index reveal the volatility of the industry; it fell 11% between 2022 and 2023 as a result of economic difficulties but gained 3% by February 2024.
Investors eyeing biotech stocks may wonder which areas are prone to buyouts. Laura Chico identified key areas to watch for potential buyouts:
“Obesity has been a really big theme in 2023, and will probably continue for the foreseeable future, but across the area, at least in these recent M&A transactions, it's been really broad-based, and I think that's really a testament to the innovation in the space. We have several deals in oncology, immunology, inflammation, neuro, and even rare diseases. So it's not just within certain verticals at this point.”
Chico advises biotech investors to monitor FDA approval news, scientific and clinical risks, and the disease categories that companies are targeting since these might provide indicators of company success. On March 6, Healthcare Equity Strategist Jared Holz talked about this possibility on CNBC's "The Exchange”:
"[Biotech] has been one of the worst spaces in all of the equity market since mid-2021. We've barely seen any positive activity for any pronounced period until very recently... When you consider the risk factors, concerning drug prices and other elements of the business... all these risk factors are much more well understood and we can continue to move higher from here."
Holz emphasizes the potential in well-positioned small-cap choices and says it's not too late to invest in large-cap biotech equities. We've put up a list of oversold biotech stocks, which includes excellent choices under $20 as well as cheap options that have been missed.
Our Methodology
To rank the best biotech penny stocks to buy now, we first identified large biotech companies priced under $5. We then selected the top 10 and ranked them based on the number of hedge fund holders in Q1 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A biotechnology laboratory with several scientists in white coats studying a microscope.
Inozyme Pharma, Inc. (NASDAQ:INZY) is emerging as one of the best biotech penny stocks to consider for investors interested in the rare disease therapeutics space. The company specializes in developing novel treatments for rare genetic disorders affecting mineralization in the body, particularly focusing on ENPP1 and ABCC6 deficiencies. The lead product candidate from Inozyme Pharma, INZ-701, is a recombinant fusion protein. It has shown promising topline findings in Phase 1/2 trials for ENPP1 Deficiency, suggesting that it may be useful in treating abnormalities in the mineralization pathway brought on by deficiencies in ENPP1 and ABCC6. The FDA, EMA, and rare pediatric disease panels have all designated INZ-701 as an orphan medication. It has also been granted FDA fast-track status. For both ENPP1 Deficiency and ABCC6 Deficiency (PXE), the company intends to share more Phase 1/2 trial data at upcoming medical conferences.
Based on the analysis of five Wall Street analysts throughout the last three months, Inozyme Pharma is rated as a Strong Buy. With a range of $14.00 to $23.00, the average 12-month price target is $16.25. This indicates a possible rise of 259.51% from the $4.52 market price as of right now. In Q1 2024, there were 18 hedge fund holders in the company. Adage Capital Management held the largest number of shares (5,328,856 shares) in the stock worth $40,819,037, comprising 0.07% of the company’s total portfolio.
In Q1 2024, Inozyme Pharma, Inc. (NASDAQ:INZY) reported a net loss of $23.347 million, compared to $17.404 million in Q1 2023. The net loss per share attributable to common stockholders was $0.38 in Q1 2024 which is an improvement from $0.40 in Q1 2023, primarily due to an increase in weighted-average shares outstanding. Their total operating expenses rose to $24.345 million from $18.369 million year-over-year which was driven by higher research and development costs, which increased to $19.111 million in Q1 from $11.857 million. Inozyme reported increased interest income of $2.374 million in Q1’24 compared to $1.327 million in Q1 2023. The company's CEO indicated that current cash reserves are sufficient to fund operations into Q4 2024.
Overall INZY ranks 6th on our list of the best biotech penny stocks to buy. You can visit 10 Best Biotech Penny Stocks to Buy Nowto see the other biotech penny stocks that are on hedge funds’ radar. While we acknowledge the potential of INZY as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than INZY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
