Penny stock investing doesn’t have to be high risk. Instead of taking gambles on micro cap biotech stocks on the pink sheets, why not just shoot for cheap but established companies on major exchanges? These are the hottest penny stocks with the least downside. You can find some explosive biotech penny stock investments this way, and easily cut out some of the gambles other risky investors chase after.

Of course, even with a listing on the NYSE or NASDAQ there is risk even for the hottest penny stocks. And cheap $1 or $2 stocks can go to zero just like penny stocks trading for a few cents a share. The financial crisis proved us that the hard way. But it’s undeniable that by focusing on more liquid penny stocks with a market cap of over $100 million and a listing on a major exchange, you can protect yourself better and limit your risk.

Some good examples of biotech penny stocks that meet these criteria are Raptor Pharmaceutical (NASDAQ: RPTP), PharmAthene (AMEX: PIP), iBio Inc. (NYSE: IBIO), AEterna Zentaris Inc. (NASDAQ: AEZS), Inhibitex (NASDAQ: INHX), Dynavax Technologies (NASDAQ: DVAX), Zalicus Inc.’s (NASDAQ: ZLCS), YM BioSciences Inc. (AMEX: YMI) and Opko Health Inc. (AMEX: OPK). I like all 9 of these biotech penny stocks, and here’s why:

Raptor Pharmaceutical: Early development-stage company Raptor Pharmaceutical (NASDAQ: RPTP) has watched its stock value increase +79% in the last 12 months, and +24% in the last six months. RPTP is also trading on the high end of its 52-week range of $1.41 to $4.04 with aims at a new high soon. Also, Raptor Pharmaceutical Corp. was recently rated at “Market Outperform” by JMP Securities in mid-March.

PharmAthene Inc.: In the last six months, PharmAthene (AMEX: PIP) has watched its stock price climb +129%, compared to a gain of +12% for the Dow Jones. This penny stock has the ability to expand your portfolio in a hurry as it gained +115% in just three days in October after a favorable development in a recent lawsuit with fellow biotech SIGA Technologies (NASDAQ: SIGA). At the time, James Altucher wrote that the stock could go “from $2 to $20” on Seeking Alpha. While PIP stock is only at around $3.50 now, there is definitely potential to move even higher.

iBio Inc.: Specializing in vaccines and therapeutic proteins, iBio Inc. (NYSE: IBIO) has watched its stock climb +14% over the past two weeks. Looking in the longer term, IBIO is up an incredible +238% in the last 12 months as well. IBIO may have a market cap just over $100 million, but it can provide serious bulk to your portfolio. Just be careful, since this penny stock can move fast both ways.

AEterna Zentaris Inc.: Next on the list is AEterna Zentaris Inc. (NASDAQ: AEZS) which has experienced a stock price hike of +108% in the last 12 months. More recently, this drug development penny stock has watched its stock climb +33% in the last six months as well. A +4% increase in the last month doesn’t hurt either. Just this week, Aeterna loss smaller than expected due to royalties, a bullish sign.

Inhibitex Inc.: Up +109% in the last year and +64% in the last half year, Inhibitex (NASDAQ: INHX) is involved with the production of anti-infection products. This biopharmaceutical penny stock is trading very near its 52-week high of $3.10, and is worth a close look for those trying to purchase penny stocks. Despite missing EPS targets in March, volume has been high in INHX and shares have rallied almost 30% in the last month even as the market has softened. Clearly investors are expecting something big from this stock.

Zalicus Inc.: Focused on treatment of pain and inflammation, biopharmaceutical company Zalicus Inc.’s (NASDAQ: ZLCS) stock has increased in value by +61% in the last six months. Year-to-date, this penny stock is up+30%, compared to a gain of +4% for the Dow Jones. Zalicus is one of InvestorPlace.com’s “Best Stocks for 2011,” and is the #1 pick out of 10 investments on the list. Read the full Zalicus recommendation here.

Dynavax Technologies: In the last 12 months, Dynavax Technologies (NASDAQ: DVAX) has seen its stock price climb +103%. More recently, this penny stock is up +48% in the last six months as well. In its last income statement, DVAX posted an impressive quarterly revenue growth of +302%. This penny stock biotech could be a strong buy.

YM BioSciences Inc.: Focused on developing treatments for cancer patients, YM BioSciences Inc. (AMEX: YMI) has jumped +58% in the last six months and +123% in the last year. The positive trend has continued in 2011 as this penny stock is up +10%, year-to-date, compared to smaller gains by the broader markets. Momentum is on this stock’s side, and my quantitative screens favor YM BioSciences.

Opko Health Inc.: Last on the list of biopharmaceutical penny stocks to buy is Opko Health Inc. (AMEX: OPK), which has posted a gain of +86% in the last 12 months. More importantly, OPK posted an astonishing quarterly revenue growth of +406% in its last income statement. That’s impressive growth from this biotech penny stock.

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