Investing in penny stocks can be both thrilling and risky. These low-priced shares, typically trading for less than $1 on the Australian Securities Exchange (ASX), offer the potential for substantial gains — but also come with higher volatility and uncertainty. For investors who are willing to do their homework and accept some risk, penny stocks can be a valuable addition to a diversified portfolio.
As of mid-2025, here are two ASX penny stocks that show strong potential and are worth watching closely.
1. Nyrada Inc. (ASX: NYR)
Sector: Biotechnology
Share Price: Under $0.20 (as of May 2025)
Overview:
Nyrada is a Sydney-based biotech company focused on developing small molecule drugs to treat major unmet medical needs. Its pipeline includes treatments for cardiovascular disease, brain injury (such as stroke and traumatic brain injury), and pain management. What makes Nyrada stand out in the crowded biotech space is its novel approach and early clinical success.
Why Watch It:
Nyrada’s cholesterol-lowering program is drawing attention from analysts and investors alike. Its PCSK9 inhibitor — a potential oral treatment for high cholesterol — could provide a low-cost alternative to current injectable treatments. With cardiovascular disease being a leading cause of death globally, this treatment has massive commercial potential.
In addition, Nyrada is also making progress in its brain injury program. Traumatic brain injury (TBI) is a condition with no approved pharmacological treatments, and Nyrada’s candidate has demonstrated promising neuroprotective effects in preclinical studies. Clinical trials are on the horizon, and positive results could significantly re-rate the stock.
Risks and Considerations:
As with any biotech stock, the key risks lie in the outcomes of clinical trials and regulatory approvals. If the science doesn’t hold up, or if there are safety concerns, the stock could face severe downside. Furthermore, early-stage biotech companies typically require substantial funding, and capital raises could dilute existing shareholders.
Bottom Line:
With two promising programs and a strong management team, Nyrada is a speculative but exciting pick for biotech-focused investors who can tolerate the risk.
2. Pantoro Ltd (ASX: PNR)
Sector: Gold Mining
Share Price: Around $0.10 (as of May 2025)
Overview:
Pantoro is a gold production and exploration company with assets primarily in Western Australia. It owns and operates the Norseman Gold Project — one of Australia's historically significant goldfields, which has been revitalised with modern mining techniques and investment.
Why Watch It:
Gold has historically been a safe haven asset, especially during periods of market volatility, inflation, or geopolitical tension. With global uncertainty still lingering in 2025, demand for gold — and by extension, gold miners — remains robust.
Pantoro has been ramping up production at Norseman and recently completed a major infrastructure upgrade. The project is now beginning to yield consistent output, and operating costs are trending down. This positions Pantoro to benefit from higher margins if the gold price remains strong or continues to rise.
Another compelling reason to watch Pantoro is its exploration upside. Several targets at Norseman remain underexplored, and new discoveries could significantly boost the company’s resource base and valuation.
Risks and Considerations:
Mining operations come with their own set of risks — from cost blowouts and operational delays to commodity price volatility and environmental hurdles. Pantoro has made progress, but it's still transitioning from development to full production, and any missteps could hurt investor confidence.
Additionally, while the gold price is currently supportive, it is influenced by global macroeconomic trends that are difficult to predict. A downturn in the gold market would affect Pantoro’s revenues and profitability.
Bottom Line:
For investors looking for exposure to precious metals via a low-cost entry point, Pantoro offers a compelling value proposition. It's a well-managed small-cap player in a bullish sector, with both production and exploration potential.
Final Thoughts: Balancing Risk and Reward
Penny stocks can offer incredible upside, but they require careful due diligence. Both Nyrada and Pantoro operate in sectors with strong tailwinds — healthcare innovation and gold mining — and are backed by promising projects. However, their small size and early stage of development mean that investors should tread carefully, ideally allocating only a small portion of their portfolio to these types of stocks.
Here are a few tips when investing in ASX penny stocks:
Do your own research (DYOR): Look into the company’s financials, leadership, product pipeline, and recent announcements.
Set a stop-loss: Given the volatility, it’s wise to define your exit point to manage risk.
Diversify: Don’t put all your money into one or two speculative stocks.
Stay updated: Monitor company news, quarterly updates, and industry trends.
For Aussie investors willing to embrace a bit more risk for potential high reward, Nyrada and Pantoro could be two penny stocks worth keeping a close eye on in 2025.
