10 penny biotechs I'm watching for August 2026, and adding slowly

Been going through the sub $10 FDA calendar this week and something jumped out that I don't think I've seen this badly since 2022. There are 257 biotechs under $10 with a dated catalyst ahead, 624 catalysts total, 50 of them inside 90 days. Ten of those companies are now trading below the cash sitting on their balance sheet. Not cheap on a DCF, not cheap on some pipeline model. The market is paying less than the bank account, and there's a dated event on the calendar.

That usually means one of two things. Either the market thinks the cash is going to get burned on something worthless, or people just stopped looking. Worth sorting out which.

KPTI (Karyopharm), around $2

This is the one I keep coming back to. Roughly $46M market cap against about $91M in cash and marketable securities. Selinexor is already approved and selling, it's an XPO1 inhibitor, and the sNDA in front of the FDA is for combining it with ruxolitinib in myelofibrosis. Aug 31. That combo matters because ruxolitinib alone leaves a lot on the table in that population and the combination data was the whole reason this had a bid a year ago.

Now the reason it's this cheap, the stock is down about 80% in a month. Whatever the market decided in July, it decided hard. And the balance sheet is genuinely tight, roughly 9 months of runway, so a raise is a real possibility and probably a bad one at this price.

But here's the part that made me actually sit up. 35% of the float is short with something like 17 days to cover. And 7 specialist funds have added shares three quarters in a row, which is not what you'd expect if the smart money agreed with the tape. Somebody is wrong here and I genuinely don't know who.

I'd size this small. It's a real shot on goal but the runway means you can be right on the drug and still get diluted before you get paid.

CAPR (Capricor), $4.20

What actually happened, the FDA released its briefing materials on Jul 27 and the stock fell 64% that session. The advisory committee met Jul 29 and went against the drug. Another 36% came off on Jul 30. And this is the second attempt, they took a CRL on Deramiocel last August.

This is now a distressed optionality trade rather than a clean FDA setup, roughly $230M market cap is below its last reported gross cash of $279M, but approximately equal to March net cash after liabilities, with another quarter of spending since then.

The 9-3 negative AdCom makes another CRL the probable outcome, but the collapse appears to be assigning very little value to deramiocel, Capricor’s manufacturing infrastructure or its earlier-stage exosome platform.

I still see it as a small speculative buy because the company says it has cash into Q4 2027, and any unexpected approval or regulatory route avoiding a completely new pivotal trial could produce a violent rerating, but this is absolutely not a low-risk below-cash trade.

ALT (Altimmune), $3.08

Different reason. Pemvidutide is a GLP-1/glucagon dual agonist and they're running it in alcohol use disorder, which is a genuinely interesting place to point that mechanism. Everyone's crowded into obesity and MASH. Almost nobody is running these in addiction.

What makes this one comfortable is the balance sheet. $332M in liquidity and something like 45 months of runway, so there's no gun to their head. And 46% of the float is short, which is the highest on the board, with three insiders buying on the open market.

Short interest that heavy against a company that doesn't need money is a different animal than short interest against a company that does.

CMPX (Compass), $1.95

Tovecimig is a DLL4 x VEGF-A bispecific in biliary tract cancer, second line, data Oct 24. 41% of the float is short with about 16 days to cover, 11 funds hold it, and two officers bought on the open market. Not directors, actual officers. Roughly 31 months of runway.

Also worth a look: ZURA at $5.79 (tibulizumab in hidradenitis, topline this quarter, 8 funds added 72% last quarter, an insider bought, 33 months of cash), ZNTL at $4.84 (azenosertib, WEE1 inhibitor in platinum resistant ovarian, Oct 23, options pricing ±106%), and IVVD at $0.59 which is the third below-cash name but I like it less because funds trimmed 35% and insiders have been selling.

One thing before anyone misreads this

Implied move tells you how big the swing is going to be, not which way. Every name here can gap either direction. I'm posting these because they're set up to move violently, not because I think they all go up.

Stuff that looked great and wasn't

TLSA screened at a ±200% implied move and MNOV at ±104%. MNOV's entire options chain has 62 contracts of open interest. That's not a signal, that's two people. EPRX as well. If an implied move looks incredible on a chain nobody trades, it's the chain. Low runway names absolutely move more. They also move the wrong way more, and you don't get to pick.

Same lens as always. Market cap first, then cash against burn, then options IV, then whether the biotech funds are adding or trimming, then insiders, and then a dated catalyst you can actually sit and wait for.

Not advice, obviously. Size for being wrong. And I do own a few of them. fyi three weeks ago, I added AUTL to my long-term commercial biotech names.