Biotech penny stocks can provide you with large trading profits. You only need to look back as far as yesterday to see the power of this. Yesterday Amarin (AMRN), which is a biotech penny stock, had a dramatic one day increase in price. It was up more than 62% on the day. In fact, it increased in value so much that it is not technically considered a penny stock anymore. Now if you were invested in Amarin you are most likely a happy camper today. If you were not, you are probably trying to figure out how you can find the next Amarin.

What makes biotech penny stocks make such large moves? The number one factor behind a large move is when the stock gets favorable clinical trial data on one of the drugs in its pipeline. This is especially true is there is positive news coming out of phase III clinical trials. That is exactly what happened with Amarin yesterday.

Biotech penny stocks can also make large moves if they are rumored to be a target of a larger pharmaceutical company of if a similar company provides it with an infusion of cash. This gives the idea that the pharmaceutical company believes there is some validity to one of more drugs in their pipeline.

Since penny stock biotech companies burn through cash at a high rate there is always a concern that they will run out. If they can’t find a pharmaceutical company to partner with and none is willing to provide cash then they are forced to issue more shares to fund future operations. You can only do this for so long before it is time to fold up operations. This is why the market loves it when a penny stock biotech company gets cash handed to it.

A somewhat recent example of a company that was unable to find a company to invest cash in its future drugs and who had to offer more shares to keep going is Anadys Pharmaceuticals (ANDS). They were once thought to have a promising drug but there appears to be question about that again (or at least there appears to be other alternatives). As a result, the stock has been in free fall since the middle of October 2010. As of this writing, the stock has been more than cut in half.

These are the opposite extremes of biotech penny stocks. You need to do your due diligence and look for companies that have promising drugs on the horizon. I wouldn’t put all your eggs in one basket. You might end up with Anadys rather than Amarin. But if you buy a few biotech penny stocks with a bright future you could end up smiling all the way to the bank.

Here is the second installment of the big list of penny stock biotech companies. You can find Part I of the biotech penny stocks by following the link. Hope it helps your research. Once again the closing prices were as of November 19th, 2010.

ADVENTRX Pharmaceuticals (ANX)

Close $2.00
Avg Vol (3m): 156,047
Market Cap: 29.33M
P/E (ttm): N/A
EPS (ttm): -2.23

ADVENTRX Pharmaceuticals hopes to balance adventure with profits with its investigational drug treatments for cancer and infectious diseases. Its lead cancer candidates are improved formulations of existing treatments that aim to reduce the toxic side effects of most chemotherapies. The company is also developing CoFactor, which may enhance the effectiveness of popular chemotherapy 5-FU. Though its cancer programs are its main focus, ADVENTRX also owns the rights to a number of potential infectious disease compounds, including treatments for bacterial infections, HIV, and influenza. ADVENTRX has reduced its workforce by more than half and is exploring strategic options for the company.

Affymax (AFFY)

Close $5.60
Avg Vol (3m): 543,011
Market Cap: 142.53M
P/E (ttm): N/A
EPS (ttm): -0.72

Affymax is designing peptides to give red blood cells a pep talk. The biotechnology firm is researching and developing possible drugs based upon these biological process regulators. Its leading drug candidate, Hematide, is an erythropoietin (EPO) mimetic, designed to stimulate red blood cell production, like EPO itself. Hematide is being investigated in late stage clinical trials as a possible treatment for anemia caused by chronic renal failure and chemotherapy. Affymax believes Hematide will be cheaper and longer lasting than the EPO stimulants currently used on dialysis patients.

Alseres Pharmaceuticals (ALSE)

Close 0.17
Avg Vol (3m): 4,633
Market Cap: 4.60M
P/E (ttm): N/A
EPS (ttm): -0.29

Unlike most people, the folks at Alseres Pharmaceuticals (formerly Boston Life Sciences) want to get on your nerves. The biotechnology company is developing therapies and diagnostics related to nervous system conditions, such as spinal cord injury, Parkinson’s disease, and attention deficit hyperactivity disorder (ADHD). Its lead candidate is Altropane, a molecular imaging agent for diagnosing Parkinson’s disease and ADHD. Another candidate, Cethrin, aims to repair nerve damage caused by spinal cord injury; Alseres licensed Cethrin from Canadian firm BioAxone Therapeutic in 2006.

Amarillo Biosciences (AMAR)

Close 0.10
Avg Vol (3m): 54,489
Market Cap: 5.44M
P/E (ttm): 16.60
EPS (ttm): 0.01

Amarillo — home to cattlemen, prairies, and…interferon? Amarillo Biosciences hopes its low-dose interferon alpha (IFNa), which modulates the immune system, will help those suffering from a range of maladies, including viral and autoimmune diseases. The company’s interferon technology, which uses a low-dose dissolving tablet, potentially offers effective treatment with fewer side effects than injectable forms of the drug. Amarillo Biosciences is developing its interferon technology as a treatment for flu, oral warts in HIV patients, and chronic cough. Through research partners, it is also investigating the drug in relation to Behcet’s disease (a severe inflammatory disorder) and hepatitis C.

American Oriental Bioengineering (AOB)

Close $2.33
Avg Vol (3m): 414,765
Market Cap: 183.09M
P/E (ttm): 5.99
EPS (ttm): 0.39

American Oriental Bioengineering (AOBO) is firmly planted in the pharmaceutical industry. Through subsidiaries, AOBO makes more than 90 plant-based pharmaceuticals and nutraceuticals based on Traditional Chinese Medicine (TCM). Its products (primarily sold in China) include prescription and over-the-counter herbal and vitamin beverages, pills, gels, patches, and powders to treat a variety of ailments from bedwetting to respiratory diseases. It sells directly to retail stores, pharmacies, hospitals, and independent distributors who act as resellers. AOBO, which was founded in 1970, operates about 30 offices throughout China. CEO Tony Liu has a controlling ownership stake (about 40%) in the company.

Amicus Therapeutics (FOLD)

Close $4.09
Avg Vol (3m): 28,905
Market Cap: 115.53M
P/E (ttm): N/A
EPS (ttm): -0.20

Amicus Therapeutics develops drugs that treat rare genetic diseases known as lysosomal storage disorders. Unlike other treatments which replace defective enzymes, Amicus uses small molecule pharmacological “chaperones” which bind to a patient’s own defective proteins and restore their functions. Its lead drug candidate, Amigal, is aimed at aiding patients with Fabry disease. Another candidate, Plicera, is in development to treat Gaucher disease, while a third candidate, AT2220 is targeting Pompe disease. The company is also researching treatments for neurodegenerative diseases including Alzheimer’s and Parkinson’s.

Anadys Pharmaceuticals (ANDS)

Close $1.22
Avg Vol (3m): 349,788
Market Cap: 52.72M
P/E (ttm): N/A
EPS (ttm): -0.46

Anadys Pharmaceuticals has hepatitis and cancer in the crosshairs. The biotechnology company is developing new therapeutic treatments for those infected with hepatitis C (HCV) and other bacterial infections, as well as for applications in oncology. Anadys is exploring compounds that either act as direct antivirals or stimulate the body’s immune system responses to fight disease. Anadys Pharmaceuticals seeks out strategic alliances with other pharmaceutical firms for development and licensing arrangements. The company has licensed its drug discovery technologies to such firms as Daiichi Sankyo, Roche, and Amgen.