Penny stocks are rarely worth it as long-term investments. But, many former penny stocks in the healthcare sector have fought against the odds to become great wealth creators for their early shareholders.
Which healthcare penny stocks should you be looking at right now? The following are two possible diamonds to keep your eye on.
1. AcelRx
AcelRx Pharmaceuticals’ success centers around its alternative to IV opioid drugs for pain. The drug, known as Dsuvia, provides patients with quicker and longer relief, thus lowering the total opioids taken during acute pain.
Despite their drug’s promise as an alternative to very addictive IV opioids, Dsuvia’s usage rate has been underwhelming so far. The company has booked under $5 million in cumulative sales for the drug. But the product’s slow sales may be about to skyrocket.
Two key changes are possibly going to trigger a huge uptick in Dsuvia’s sales.
First, Dsuvia will now be included in all Army troop kits and uniforms. This deal is estimated to be worth up to $30 million. Second, the company made a deal with Zimmer Biomet Dental to use their Dsuvia during dental surgeries. While the details are hazy, AcelRx says the possible market size is over 7 million dental procedures every year.
While the company might never realize the $1 billion in sales as some had expected prior to its launch, there is still a good chance the drug will gain the momentum to rake in a few hundred million every year. That’s a very healthy revenue for a company with a market cap of $200 million.
2. Sundial
Canadian pot company Sundial Growers has quadrupled in value since its last fiscal Q3 earnings report. The stock surged over this time period for two simple reasons.
First, pot stocks have been experiencing a renaissance since the election on the hope that democrats — who now control Congress and the White House — will push major reforms on legal cannabis.
Second, Sundial announced it was exploring many strategic possibilities, including a sale, a merger, or an investment into another Canada-based pot company. Since this, Sundial has greatly increased its cash position, maybe in preparation for a large deal.
With their market cap reaching almost $2 billion, they are not a serious acquisition target. That means any potential deal will see Sundial being the buyer.
But the bad news is there aren’t any targets within the company’s small price range that would greatly boost its value instantly. So, the next step — and maybe the quickest way to create value for shareholders — would be to merge with another Canadian pot giant.
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