Plowing through the most populated regions of the world like a hurricane, the novel coronavirus was and still is an unrelenting force. According to the time of writing data from Worldometers.info, 4.86 million people succumbed to the SARS-CoV-2 virus worldwide. But like any calamity, this too shall pass. Regular folks looking to reclaim their lives aren’t the only ones looking forward to 2022; speculators seeking to profit from penny stocks are looking forward to the new year as well.

Of course, the desire to earn profits from the capital market is nothing new; frankly, it’s one of the components that make us human. But this time is different due to the once-in-a-century pandemic. In fact, you might call it a unique situation, something that’s never been seen before. Thanks to a combination of unprecedented access to various investment markets and the surge in interest toward biotech, penny stocks in this sector may benefit.

Mostly, this otherwise ultra-speculative arena has one major catalyst to rule them all. With the Covid-19 crisis gradually fading both domestically and internationally, we may be coming to the end of this crisis. If so, biotech penny stocks can flourish as the underlying industry can then refocus on other pressing acute and chronic conditions. Even if Covid-19 sticks around, companies that address specific areas of the disease could rise higher in value.

Now, to be absolutely clear — and to keep the attorneys happy — you don’t want to mess around with penny stocks, whether they’re tied to biotech or any other sector. If you do trade, you must do so with a sober mind and with extreme risk-mitigation protocols. Otherwise, the risk isn’t just limited to destroying your finances. People who have lost extreme amounts of money have been driven to commit unspeakable crimes and self-harm.

Sorry to be a downer but I’d much rather have you approach these trades with a pessimistic attitude rather than an optimistic one. That way, there’s a much better chance that you’ll only put forward a small amount of risk capital at play for these biotech penny stocks.

• Bellus Health (NASDAQ:BLU)
• Entera Bio (NASDAQ:ENTX)
• CytoDyn (OTCMKTS:CYDY)
• Adhera Therapeutics (OTCMKTS:ATRX)
• Diffusion Pharmaceuticals (NASDAQ:DFFN)
• Halberd (OTCMKTS:HALB)
• Therapeutic Solutions International (OTCMKTS:TSOI)

While many definitions of penny stocks exist, I’m mainly focusing here on companies that have upside potential but have also demonstrated extreme volatility risk. Therefore, I’m not necessarily tied to the literal interpretation of “penny.”

Biotech Penny Stocks: Bellus Health (BLU)

A clinical stage pharmaceutical company focused on addressing various afferent hypersensitization-related disorders, Bellus Health is particularly relevant for the current environment and the post-Covid future. Specifically, Bellus’ lead candidate, BLU-5937, is currently being studied in Phase 2 clinical trials in refractory chronic cough and “chronic pruritus associated with atopic dermatitis.”

As the Mayo Clinic explained, a “chronic cough is a cough that lasts eight weeks or longer in adults, or four weeks in children.” Further, the condition is more than just an annoyance. “A chronic cough can interrupt your sleep and leave you feeling exhausted. Severe cases of chronic cough can cause vomiting, lightheadedness and even rib fractures.”

Keep in mind Mayo Clinic published this description on July 9, 2019. If chronic cough was bad then, it’s downright horrible today due to fears and stigmatization associated with Covid-19. Therefore, BLU could be a major beneficiary among penny stocks.

Now, the big drawback if you’re hunting for great deals is that BLU has already skyrocketed in recent weeks. It has come down some from its peak, which may suggest a consolidation period before moving higher again. But because of the risks associated with penny stocks, I’d just throw in a small risk position now and wait and see what the market might hold later.

Entera Bio (ENTX)

Headquartered in Israel, Entera Bio focuses on the development of drugs for unmet medical needs. Particularly, Entera is known for its innovative technology in delivering large molecules via swallowable tablets. Just right there, ENTX has potential among speculative penny stocks.

According to a Harvard Health Publishing article citing data from the Centers for Disease Control and Prevention, up to 25% of American adults are afraid of needles and that may lead 16% in the U.S. to skip vaccinations. Anecdotally, I’ve never met anyone who enjoyed getting pricked.

As well, we’re really talking about contextual fear. If injections involved certain body parts, that fear may go up to 100% — and maybe more due to sheer terror.

On the pipeline, Entera recently completed its “Phase 2 clinical trial of EB613, an oral formulation of human parathyroid hormone (1-34), or PTH, for the treatment of osteoporosis.” The news hasn’t skyrocketed ENTX, which may actually be an opportunity for speculators.

Currently, shares appear to have found support at the $4.40 level. Any purchases near there could result in significant upside, although do bear in mind the volatility of penny stocks.

Biotech Penny Stocks: CytoDyn (CYDY)

Reading history books, you cannot help but marvel at the barbarism of ancient medical technologies, such as surgical procedures without anesthesia. Granted, myriad technologies weren’t available at the time but still … yikes!

Hundreds of years from now, kids will probably look back to our time with the same dread. Sure, we currently have treatment options for various diseases but many tend to have a brute-force approach; that is, kill what ails the patient and if healthy cells get in the way, it’s just collateral damage.

CytoDyn hopes to upend this paradigm by researching and developing precision medicine — in its words, “more specificity, less side effects.” Its target, the CCR5 receptor, “been implicated in multiple disease processes from HIV, GVHD, NASH, stroke recovery, multiple sclerosis, Parkinson’s disease, to metastatic cancer.”

Thanks to its multiple catalysts — including a Phase 3 trial for a treatment for severe Covid-19 symptoms — CytoDyn offers wide-ranging relevance. But will it actually matter for CYDY?

Again, we’re talking penny stocks here so that’s not something I can answer. But if you’re looking for a relative discount, CYDY is down 50% over the trailing year since the Oct. 8 session.

Adhera Therapeutics (ATRX)

Per its corporate press release, Adhera Therapeutics is a “clinical stage biopharmaceutical company focused on identifying advanced drug candidates that may qualify for accelerated developmental pathways. The Company has recently licensed two drug candidates, MLR-1019 and MLR-1023, from the Melior Discovery family of companies.”

Adhera has two main areas of focus. First, it’s “developing MLR-1023 (tolimidone) as a new drug for Type I diabetes with a focus on C-peptide positive patients. MLR-1023, a lyn kinase activator, has demonstrated exceptional clinical safety and tolerability in over 700 patients in Phase 2a and Phase 2b Type 2 diabetes studies.”

Second, the company’s “MLR-1019 (armesocarb) is a new class of drug for Parkinson’s Disease (PD) and represents the only drug to address both movement and non-movement symptoms of PD.”

Of course, Parkinson’s disease is a major catalyst for ATRX and other penny stocks associated with the condition due to a substantive awareness campaign. In addition, a Centers for Disease Control and Prevention report from 2020 “shows a nearly 30% increase in type 1 diabetes (T1D) diagnoses in the United States, with youth cases growing most sharply among diverse populations.”

Biotech Penny Stocks: Diffusion Pharmaceuticals (DFFN)

A life sciences company, Diffusion Pharmaceuticals specializes in novel therapies that enhance the body’s ability to deliver oxygen. Its lead product, trans sodium crocetinate (TSC), allows tissues with low oxygen levels to receive the critical chemical element. This condition, which is known as hypoxia, represents a serious complication in several therapeutic processes.

Naturally, Diffusion’s TSC product has significant implications for addressing the coronavirus pandemic. Per a report from BMJ Journals, hypoxia is a “frequently overlooked clinical entity in patients” suffering from Covid-19. The problem for frontline medical professionals is that patients can show no respiratory distress but have low oxygen saturation, which can then lead to serious illnesses.

Therefore, BMJ “emphasises the importance of meticulous clinical examination including oxygen saturation measurements in suspected or confirmed patients.” Logically, such a backdrop makes DFFN a presently relevant play among biotech penny stocks.

But how long will this relevance last? Due to the uncertainties of the pandemic, I wouldn’t bet the farm on DFFN simply on the basis of its Covid-19 indication. Instead, I’d look to Diffusion’s other uses for TSC before deciding.

Halberd (HALB)

If you’ve heard about Halberd, you probably know about its relevance toward the Covid-19 pandemic. Per its website, the company’s patented extracorporeal treatment “is applicable to many hard-to-cure blood-borne and neurologic diseases, including Covid-19” and other viruses.

Frankly, I’m not too sure how the Covid-19 angle will play out for Halberd and the other penny stocks that are mentioned on this list. Sure, the science is very intriguing. However, with Merck (NYSE:MRK) muscling its way into the narrative with its antiviral Covid pill, pandemic-related catalysts could end up fading. Then again, the Merck threat isn’t a guarantee so we’ll see.

Outside the global health crisis, Halberd offers an incredibly compelling proposal for neurological conditions, particularly post-traumatic stress disorder. Obviously, due to the various conflicts that our servicemembers found themselves in following the Sept. 11 attack, we need a solution for PTSD.

According to the U.S. Department of Veterans Affairs, between 11% and 20% of those who served in Operations Iraqi Freedom and Enduring Freedom suffer from PTSD in a given year.

To be clear, HALB is risky, even compared to other penny stocks. Therefore, don’t let your emotions or patriotism cloud your judgment on this one.

Biotech Penny Stocks: Therapeutic Solutions International (TSOI)

Per a corporate press release, Therapeutic Solutions International “is focused on immune modulation for the treatment of several specific diseases.” In August of this year, management announced that Therapeutic Solutions successfully completed “a series of preclinical experiments requested by the United States Food and Drug Administration (FDA) in order to begin Phase I/II clinical trials.”

The therapeutic in question is the company’s trademarked JadiCell, which is used for the “treatment of chronic traumatic encephalopathy (CTE).” As sports fans know, “CTE is caused by repetitive concussive/sub-concussive hits to the head sustained over a period of years and is often found in football players. The condition is characterized by memory loss, impulsive/erratic behavior, impaired judgment, aggression, depression, and dementia.”

Given the high-profile nature of CTE, Therapeutic Solutions may enjoy a public sentiment boost. That’s especially true now that amateur, collegiate and professional sports are back in full swing. Transitioning out of Covid bubbles and other security protocols to the chronic conditions that plague high-contact sports, TSOI may increase its time in the spotlight.

Of course, with shares currently trading under 5 cents, you want to be extremely careful how you approach this.

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Read More: Penny Stocks — How to Profit Without Getting Scammed

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.