In the wake of the coronavirus pandemic, biotech stocks have been of interest to investors, given that they’re some of the top gainers in the past few weeks. In particular, low float biotech stocks have been some of the top gainers because of significant interest from traders. Low float stocks have fewer stocks available for public trading after accounting for institutionally held stock. Usually, in these kinds of stocks, there are only around 15 million shares available for public trading, while the rest of the shares are held by insiders, employees, and major shareholders.
Since there are fewer stocks available for trading, low float stocks are highly volatile. For instance, a low float stock of around 500,000 shares is likely to experience significant price movement relative to a high float stock of around 10 million shares. Short interest can cause a surge in demand for these shares, causing a short squeeze, which can push the share price higher.
Here are 4 low float biotech stocks that present massive potential for day traders:
4 Low Float Biotech Stocks to Buy in April: Equillium Inc. (NASDAQ:EQ)
Equillium is a clinical-stage biotech company that leverages its deep knowledge of immunology in the development of novel products that treat inflammatory and autoimmune disorders with an unmet medical need. The company has 17.62 million total shares outstanding and a 6.29 million share float.
Recently, the company signed a $15 million common shares purchase agreement with Lincoln Park Capital Fund. According to the agreement, after effecting the registration statement, the company will have the right to sell up to $15 million worth of common shares to Lincoln Park Capital over 36 months. Equillium will control the amount and timing of the sales of shares subject to restrictions as per the Nasdaq listing regulations.
4 Low Float Biotech Stocks to Buy in April: Avenue Therapeutics Inc. (NASDAQ:ATXI)
Avenue Therapeutics is a specialty pharmaceutical company that develops IV tramadol, which is a possible alternative to conventional opioids for patients experiencing acute pain. Fortress Biotech founded the pharmaceutical company, headquartered in New York. The company has a total outstanding stock of around 17.68 million shares and a stock float of approximately 6.38 million.
Recently, the company released its corporate highlights and financial results for fiscal 2019. Avenue indicated that it closed an equity investment and contingent acquisition deal with Cipla Limited’s subsidiary, InvaGen Pharmaceuticals.
In June last year, Avenue released data from its third phase study of IV tramadol evaluating effectiveness in patients after abdominoplasty surgery.
The company had $8.7 million in cash and cash equivalents at the end of the year and reported a net loss of $25.9 million or $1.65 on a per-share basis.
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ATXI stock is up over 40% over the past three weeks.
4 Low Float Biotech Stocks to Buy in April: NeuroBo Pharmaceuticals Inc. (NASDAQ:NRBO)
NeuroBo Pharmaceuticals focuses on neurodegenerative disease treatments through the multimodal approach that helps it to address various underlying mechanisms of the diseases, as well as slowing disease progression. The company has 15.68 million total shares outstanding, of which only a float of 6.41 million is available for public trading. NRBO stock has surged over 110% in the past month.
Recently, the company completed a merger with Gemphire Therapeutics, which was announced at the end of 2019. The merged company will focus on advancing its neurodegenerative disease clinical-stage products. In fiscal 2019, the company reported a net loss of $21.3 million or $4.08 per share and ended the year with cash and investments of $13.9 million.
4 Low Float Biotech Stocks to Buy in April: Nemaura Medical Inc. (NASDAQ:NMRD)
Nemaura develops micro-systems-based diagnostic wearable devices, and currently, it is commercializing proBEAT™ and sugarBeat™. sugarBEAT is a flexible non-invasive glucose monitor that offers real-time glucose monitoring. The company has 20.81 million shares outstanding and a share float of 6.66 million.
The company recently announced that it is planning to launch a new product line by repurposing the sugarBEAT, because its inbuilt sensor for temperature can monitor body temperature on the skin. The biotech company is planning to speed the launch of the temperature monitor through direct sales and partnerships.
NMRD stock is up around 65% since February 20 and is now trading at $5.22.
Bottom Line
These 4 low float biotech stocks present a massive opportunity for traders who might want to feed off their volatility. Since there are limited shares for public trading, stock prices are susceptible to any slight movement.
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