In this article, we will take a detailed look at the 10 Best Biotech Stocks to Buy According to Billionaire Steve Cohen.
Steve Cohen, whose success at SAC Capital made him one of the most successful hedge fund managers on Wall Street, is a worried man. The chairman and CEO of hedge fund Point72 Asset Management believes there is a 45% chance that the US economy will plunge into recession.
Amidst recession fears, the billionaire investor is closely watching economic data for insights into the direction the market is likely to move.
“What I’m looking for is… yeah the markets have rallied, it’s great… I want to see when the data turns down how the market’s going to react and that’ll tell me a lot about whether we’re priced correctly or not.”
The remarks come as the overall market has recouped all the losses accrued in April as President Donald Trump waged an aggressive trade and tariff war. Even as the overall market remains bullish with the S&P 500 up by about 5%, the SPDR S&P Biotech ETF (XBI) remains under pressure, down more than 11% in 2025.
Nevertheless, the underperformance has not stopped billionaire investor Cohen from diversifying Point72 Asset Management’s investment portfolio into the biotechnology sector. That’s because biotechnology companies working on game-changing drugs offer high-risk, high-reward investment opportunities.
In addition to diversification, he relies on a long-short equity strategy and sector-aligned model to extract value from the equity markets. The investment strategy was the catalyst behind the hedge fund’s returning approximately 19% in 2024 and improving from a 10.6% return in 2023.
Considering the current economic outlook, let’s take a closer look at our list of the 10 Best Biotech Stocks to Buy According to Billionaire Steve Cohen.
Steven Cohen of Point72 Asset Management
Our Methodology
To compile the list of the best biotech stocks to buy according to billionaire Steve Cohen, we scanned Point72 Asset Management’s equity portfolio. We settled on Steve Cohen’s top biotech investment plays, with tremendous long-term prospects. Upon analyzing, we ranked the stocks in ascending order based on Point72 Asset Management’s equity stake.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Best Biotech Stocks to Buy According to Billionaire Steve Cohen
10. IDEAYA Biosciences, Inc. (NASDAQ:IDYA)
Point72 Asset Management Equity Stake: $2.29 Million
Number of Hedge Fund Holders: 30
IDEAYA Biosciences, Inc. (NASDAQ:IDYA) is one of the best biotech stocks to buy according to billionaire Steve Cohen. On July 22, TD Cowen began coverage of IDYA with a Buy rating, highlighting the company’s $1.91 billion valuation and strong analyst consensus.
Price targets span $25 to $66, reflecting optimism for its expanding pipeline, which is set to include nine clinical-stage programs that the firm praised as “the best of targeted oncology.”
Among the highlights, TD Cowen emphasized the daro + criz combo therapy targeting metastatic uveal melanoma, with a 2026 launch and promising neoadjuvant prospects. The firm also signaled confidence in upcoming DLL3 ADC results and noted that MAT2A’s efficacy could complement Trodelvy treatments, adding further depth to Ideaya’s clinical momentum.
IDEAYA Biosciences, Inc. (NASDAQ:IDYA) is a clinical-stage oncology company focused on discovering and developing targeted therapies for cancer patients. It utilizes molecular diagnostics to identify patient populations most likely to benefit from their therapies.
9. Zai Lab Limited (NASDAQ:ZLAB)
Point72 Asset Management Equity Stake: $3.19 Million
Number of Hedge Fund Holders: 26
Zai Lab Ltd (NASDAQ:ZLAB) is one of the best biotech stocks to buy according to billionaire Steve Cohen. On June 30, Leerink Partners raised its price target for the stock to $75 from $73. The research firm also reiterated an ‘Outperform’ rating on the stock.
The research firm hiked its price target following positive Phase III trial results from the FORTITUDE-101 study. The study was evaluating bemarituzumab as a first-line FGFR2B-positive gastric cancer treatment. The candidate drug, developed in partnership with Amgen, met its primary endpoint while demonstrating a significant and clinically meaningful overall survival benefit compared to placebo plus chemotherapy.
Following the positive results, Zai Labs plans a second Phase III trial, FORTITUDE-102, which will evaluate bemarituzumab in combination with chemotherapy and nivolumab. The company expects top-line data in the second half of the year that will affirm the candidate drug as a first-line treatment for gastric cancer. It also plans to file for regulatory approval in China following the positive results.
Zai Lab Ltd (NASDAQ:ZLAB) is a biopharmaceutical company that discovers, develops, and commercializes innovative medicines for oncology, autoimmune disorders, infectious diseases, and neurological disorders.
