Investing in OTC: Complete Guide 2025

The over-the-counter (OTC) markets occupy a unique position within contemporary finance. Investing in OTC assets offers an alternative for investors looking to diversify their portfolios outside of traditional stock exchanges while seeking new optimization and risk management levers. This comprehensive article provides a complete view of the OTC market, its mechanisms, and its challenges for 2025, with a detailed look at the healthcare/biotechnology sector and MedinCell, listed on Euronext Paris.

Definition and Principles of the OTC Market

An OTC asset is traded outside organized markets. Transactions occur directly between buyers and sellers through specialized broker networks, electronic platforms, or bilateral negotiations. Unlike traditional stock exchanges (Euronext, NYSE, Nasdaq...), the OTC market is characterized by greater flexibility in transactions, global coverage, and specific responsiveness to the needs of institutional investors, companies, and informed individuals.

  • Flexibility: adaptation of transfer and settlement methods, allowing for tailored solutions.
  • Confidentiality: terms of transactions are often private and do not undergo immediate publication.
  • Complexity of Assets: the OTC market allows access to sophisticated financial products (derivatives, structured bonds, exotic products).
  • Counterparty Risk: the absence of a central clearing house exposes parties to a higher risk compared to regulated markets.

The OTC Market in France: Reality and Media Confusion

In France, it is common for the OTC ecosystem to be mistakenly associated with certain assets listed on Euronext or companies like MedinCell. It is important to be precise: MedinCell, frequently cited as an example, is not listed on an OTC market but rather on Euronext Paris, a recognized European regulated market. The confusion often arises from the ease of trading, the volatility of certain sectors (particularly healthcare/biotechnology), and their attractiveness to investors seeking long-term potential.

  • Euronext Paris: European regulated market, offering high levels of control and transparency.
  • OTC Market: reserved for certain derivatives, bonds, or private instruments, often absent from major stock exchanges.

To Remember: Always verify the official listing of a company before any investment, referring to recognized markets such as Euronext, and not to OTC platforms if the asset is not listed there.

Case Study: MedinCell (FR0004065605)

MedinCell attracts attention due to its strong growth on Euronext Paris, its innovative sector, and its international operations in biotechnology. It is an illustration of the dynamism possible for companies listed on regulated markets, often mistakenly confused with OTC assets.

Fundamental Characteristics of the MedinCell Share

  • Industry : Health
  • Industry : Biotechnology, extended-release injectable drugs
  • Stock Exchange Market : Euronext Paris (and not over-the-counter market)
  • Eligibility for PEA/PEA-PME : Yes
  • Estimated Market Capitalization (November 10, 2025) : Approximately 1.14 billion euros
  • Number of Shares Outstanding : Nearly 38.7 million
  • Closing Price on November 10, 2025 : €29.48
  • Midday Price on the same day : €30.82
  • Net Profit 2024-2025 : -€0.88 to -€0.60 per share
  • P/E Ratio (PER) : Negative or not applicable due to losses (PER 2025: -41.61 to -366.2 according to analysts)
  • Dividend : None paid
  • Beta : Not published during the last listing, generally above 1 for French biotechs
  • Revenue 2024-2025 : 9 million euros
  • Main Shareholders : Founding Family Nguyen (9.57%), employees/consultants (21.05%), board of 7 directors

Capital Structure and Governance

The capital structure of MedinCell reflects a notable openness towards institutional and individual investors. This composition ensures stable governance and the ability to mobilize new financing to support R&D and international ambitions:

  • Nguyen Family : 9.57%
  • Employees and Consultants : 21.05%
  • Board of Directors : 7 members
  • General Management : Christophe Douat

Health Sector / Biotechnology on Euronext Paris

The health/biotechnology sector, particularly dynamic on Euronext Paris, attracts investors for its capacity to generate growth and innovation.

  • Industry Specifics : Long R&D cycles, high volatility of stock prices linked to clinical advances, impact of national and international regulations.
  • Valuation : Strongly influenced by the prospects of developing new drugs, obtaining marketing authorizations, and the pace of adoption by prescribers.
  • Risks : Dependence on financial and commercial partners, uncertainty related to clinical studies and reimbursement by the Health Insurance.

The strong growth of MedinCell within the MSCI World Small Cap index illustrates the emerging capacity of French biotechs to position themselves on the global stage, energizing the sector and attracting foreign capital.

OTC vs Regulated Market : Strategic Comparison for Investors

Characteristic OTC MARKET REGULATED MARKET (e.g., Euronext)
Transparency Low, private data High, centralized publication
Liquidity Variable, sometimes low Generally high
Regulation Flexible, minority Strong, public control
Access to investors Institutions, knowledgeable individuals Institutions, individuals, global
Specific risks Credit risk, minimal oversight Less due to central control
Examples Derivatives, private bonds Stocks of listed companies (MedinCell)

Investment Strategies on the OTC and Regulated Markets

Sectoral Analysis and Segment Selection

The choice to invest in the OTC or regulated market depends on clear objectives:

  • Institutional Investors : seek access to more sophisticated products for risk management or alpha generation through customized assets.
  • Experienced Individuals : may sometimes turn to OTC, but generally find more security and liquidity on Euronext or recognized platforms.

Valuation of Shares: Key Points

To value a share in the biotech sector, it is essential to examine:

  • Revenue Prospects in the short and medium term: licensing contracts, milestones, royalties, sales of medicines with international partners.
  • Product Pipeline : number and maturity of candidates at the clinical stage.
  • Financial Results : P/E ratios, revenue growth, debt structure, ability to raise new funds.

Risk Management

  • Diversification : distribution across multiple sectors, asset classes, and geographic regions.
  • Stop-Loss Protection : limiting losses in case of sudden reversal.
  • Regular Revaluation : monitoring official announcements, clinical results, and financial publications.
  • Regulatory Watch : anticipating legal changes affecting listing and liquidity.

Growth Prospects: Health, Biotech, and Innovation 2025

The OTC sector and the biotech segment show promising prospects for 2025, driven by technological innovation, the growing need for specialized treatments, and the development of electronic trading platforms.

Central Role of Innovation

  • BEPOTech® Technology : MedinCell focuses on the development of long-duration injectable solutions, collaborating with Teva, Unitaid, and the Bill & Melinda Gates Foundation.
  • Artificial Intelligence & Machine Learning : integrated into new drug discovery protocols, molecule design, and clinical research automation.
  • Internationalization : expansion of American and Asian markets (approved in South Korea, growth in the USA), major milestones (expected $105M) and increasing royalty streams (5% to 9% of net sales of partner products).

Evolving Regulatory Standards

  • The regulatory authorities are strengthening controls over OTC derivatives, structured bonds, and new types of financial products like crypto-assets.
  • Companies listed on Euronext are subject to increased oversight, ensuring transparent access to information and advanced investor protection levels.

Focus: MedinCell in 2025, Performance and Risks

The MedinCell stock has seen an increase of over 80% since the beginning of 2025, driven by its innovations and strategic agreements. After integrating into the MSCI World Small Cap index and a series of international approvals (US FDA, Canada, South Korea), the company still faces:

  • Increased Volatility : direct impact of clinical announcements and unmet sales targets (case Uzedy/Teva, decline in quarterly figures).
  • No Dividend : reinvestment strategy in growth and R&D, typical of the biotech sector.
  • Negative P/E Ratio : typical loss-making situation during expansion, P/E ratio ranging between -41 and -366.2 according to analyst projections.
  • Unpublished Beta : volatility higher than the typical market, recommended monitoring for high-risk profiles.
  • Market Capitalization Fluctuating Around €1.14 billion : dependent on the number of shares and rapid price fluctuations.

For investors, the key is to adopt a systematic approach based on the verification of official figures and real-time market publications (Euronext, Boursorama, Fortuneo...), avoiding unverified sources.

Frequently Asked Questions about OTC and Regulated Investment

How to Invest in Meaning OTC?

To invest in OTC markets, it is necessary to:

  1. Access a specialized platform or contact an approved broker.
  2. Identify the asset precisely (bond, derivative, structured product...) and understand its operation.
  3. Analyze specific risks, particularly counterparty and liquidity risks.
  4. Determine clear objectives (diversification, yield, tax optimization).
  5. Implement active monitoring of regulatory changes and market developments.
  6. Consider protective orders such as stop-loss based on the volatility of the product.

What Differences Between OTC Market and Regulated Market?

  • Transparency : the regulated market publishes all data in real time, unlike the OTC.
  • Liquidity : often superior on Euronext.
  • Protection : legal framework reduces major risks on the regulated market.
  • Accessibility : the OTC is sometimes reserved for institutional investors or informed individuals.

What are the main risks of investing in OTC?

  • Credit risk : possible failure of the counterparty in the absence of a clearing house.
  • Liquidity risk : difficulty in reselling the asset or valuing it quickly.
  • Regulatory risk : legal changes that may significantly affect the asset.
  • Valuation risk : prices less easily verifiable than on an exchange, lack of transparent consensus.

Why is the health/biotechnology sector so popular in 2025?

  • Radical innovation and medical advances (injectable treatments, genomics, AI applied to research).
  • Accelerated growth potential driven by population aging and growth of Asian/American markets.
  • Access to financing and strengthened international partnerships.

How to verify the reliability of a listed stock?

  • Consult the official quotation platform (Euronext, Paris Stock Exchange...)
  • Check on specialized websites (Boursorama, Fortuneo) the latest price, number of shares, and market capitalization
  • Analyze the company's financial statements and quarterly reports
  • Compare with analysts' opinions and sector consensus

Is MedinCell an OTC stock?

No, MedinCell is listed on Euronext Paris, which guarantees a high level of transparency and protection for the investor.

Conclusion: Best Practices for Investing in OTC or on Euronext Paris

Investing in the OTC market or in stocks like MedinCell requires a rigorous approach: thorough sector analysis, systematic verification of official figures, dynamic risk management, and anticipation of regulatory changes. Always prioritize active monitoring and continuous surveillance to secure your investments and take advantage of the opportunities offered by health and biotechnology. The prospects for 2025 remain excellent in these sectors for informed and strategic investors.