In this piece, we discuss the 10 Best Small-Cap Biotech Stocks to Buy According to Analysts.
Small-cap biotech stocks are marking their latest resurgence, attracting renewed investor attention. This resurgence, which follows a prolonged period of underperformance, is driven by a broader market rotation and improving technical indicators. Healthcare, including biopharma, is emerging as a constructive sector as investors pull money out of tech, Craig Johnson, Piper Sandler’s Chief Market Technician, highlighted in his interview with CNBC on November 12. The Health Care Select Sector SPDR Fund (XLV) is up 11.09% in 2025 so far.
He cited several previously declining names within the sector showing improvements. He also discussed small-cap biotech stocks in the XBI ETF, which have made multi-year gains. He believes investors could see money flowing out of high-flying AI stocks and into more attractive opportunities in some healthcare and biotech stocks. The iShares Biotechnology ETF has recorded a gain of approximately 25% year-to-date.
Leerink Partners’ David Reisinger also reinforced Johnson’s view the same day, seeing the inflow of capital into biopharma as a generalist investor’s adjustment of their portfolios following a long period of underweighting the sector. This renewed interest in the sector is particularly benefiting both large-cap and small-to mid-cap biotech companies. He noted increased M&A activity in the sector this year, which further bolsters potential upside.
The year has already seen several acquisitions within the biotech space, including Pfizer’s $10 billion acquisition of Metsera, Roche’s $3.5 billion acquisition of 89bio, and Genmab’s $8 billion acquisition of Merus N.V. He believes some undervalued names like Bristol Myers could benefit from upcoming trial readouts, especially in Alzheimer’s disease and novel blood thinner studies.
Thus, the market is seeing a convergence of technical momentum, market rotation, and fundamental catalysts.
This leads us to our list of small-cap biotech stocks, which offers a glimpse into some of the best names within the sector for investors seeking the most promising opportunities in the current market.
Our Methodology
To curate our list of the best small-cap biotech stocks to buy, according to analysts, we relied on screeners, financial media, and ETFs to compile a list of biotech and biotech-related companies with a market capitalization between $300 million and $2 billion. Next, we selected the top 10 stocks with the highest upside potential, as of November 10, 2025. We also considered hedge fund sentiment surrounding each stock, using Insider Monkey’s hedge fund database. Our final list of the best small-cap biotech stocks is ranked in ascending order based on upside potential.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10. Viridian Therapeutics, Inc. (NASDAQ:VRDN)
Number of Hedge Fund Holders: 39
Upside Potential: 36.71%
With significant upside potential, Viridian Therapeutics, Inc. (NASDAQ:VRDN) secures a spot on our list of the best small-cap biotech stocks to buy according to analysts.
On November 6, 2025, RBC Capital raised its price target on Viridian Therapeutics, Inc. (NASDAQ:VRDN) from $41 to $45, while maintaining an “Outperform” rating. The investment firm’s bullish stance stemmed from clear visibility toward profitability, seen through its increased cash position of $888 million, thanks to financing deals, including $55 million from DRI royalty financing, a $70 million upfront Japan licensing agreement, a $289 million follow-on offering, and access to a $300 million credit facility.
Furthermore, Viridian Therapeutics, Inc. (NASDAQ:VRDN) has completed key patient enrollments in its late-stage clinical studies. Readouts for active and chronic Thyroid Eye Disease (TED) are expected in Q1 and Q2 2026, respectively, driving the investment firm’s bullish stance.
Meanwhile, Viridian Therapeutics, Inc. (NASDAQ:VRDN) reported Q3 2025 results on the previous day. The company closed the quarter with $490.9 million in cash on hand. The cash position further increased as a result of the financing deals. The quarter also marked a significant increase in R&D expenses, which grew from $69.2 million in the same quarter last year to $86.3 million.
Viridian Therapeutics, Inc. (NASDAQ:VRDN) is focused on the development and commercialization of therapies for rare diseases.
9. UroGen Pharma Ltd. (NASDAQ:URGN)
Number of Hedge Fund Holders: 37
Upside Potential: 49.17%
UroGen Pharma Ltd. (NASDAQ:URGN) is one of the best small-cap biotech stocks to buy according to analysts.
On November 6, 2025, UroGen Pharma Ltd. (NASDAQ:URGN) reported its Q3 2025 results, highlighting strong growth in demand alongside its steady commercial expansion. Furthermore, preliminary October figures indicated that demand revenue more than doubled compared to the previous three months. This growth reflects the increasing adoption of physicians amid operational delays. The company closed the quarter with $127.4 million in cash and marketable securities.
As the permanent billing code takes effect in early 2026, UroGen Pharma Ltd. (NASDAQ:URGN) anticipates a smoother process, despite product uptake potentially facing administrative lags of up to 60 days due to reimbursement and coding complexities. Furthermore, the company noted an expansion of its sales force to 82 representatives. With this expansion, the company strengthened physician outreach and patient access across major payers, with coverage accounting for over 95% of insured lives.
The quarter saw UroGen Pharma Ltd. (NASDAQ:URGN)’s net loss widen from $23.7 million in Q3 2024 to $33.3 million, driven by rising R&D expenses and delayed revenue recognition. Looking ahead, the company appears to be in a solid position, focusing on optimizing patient onboarding and accelerating reimbursement cycles, which is well supported by the growth in product demand noted in October. UroGen provided revenue guidance for only JELMYTO, expecting $94 million to $98 million in net revenues for the full year.
UroGen Pharma Ltd. (NASDAQ:URGN) focuses on developing and marketing specialty cancer treatments, delivering targeted, minimally invasive therapies.
8. Liquidia Corporation (NASDAQ:LQDA)
Number of Hedge Fund Holders: 43
Upside Potential: 55.49%
With significant upside potential, Liquidia Corporation (NASDAQ:LQDA) secures a spot on our list of the best small-cap biotech stocks to buy according to analysts.
On November 4, 2025, Raymond James raised its price target on Liquidia Corporation (NASDAQ:LQDA) from $41 to $47, while reiterating a “Strong Buy” rating. The investment firm’s bullish stance reflects YUTREPIA’s 75% growth in U.S. prostacyclin revenue during the third quarter, which turned profitable earlier than expected. Meanwhile, the company raised peak sales estimates to $2 billion from $1.1 billion, thanks to strong early launch performance. The raised guidance boosted analyst sentiment.
Liquidia Corporation (NASDAQ:LQDA) announced Q3 2025 results on November 3, 2025, reporting YUTREPIA net sales of $51.7 million. The quarter marked a net loss of $3.5 million, or $0.04 per diluted share, and positive adjusted EBITDA of $10.1 million. However, YUTREPIA achieved profitability in the first quarter of its full commercial launch. Over 1,500 patients were enrolled in the therapy, alongside more than 2,000 prescriptions, and strong payer coverage was achieved through contracts with the three largest commercial payers.
Liquidia Corporation (NASDAQ:LQDA) ended the quarter with $157.5 million in cash on hand, reporting a net cash flow of $5 million in September. The company’s short-term revenue recognition was affected despite strong early commercial uptake, as roughly 50% of new patients used a 28-day voucher program. Meanwhile, Liquidia is looking for additional clinical applications in IPF and PPF.
With its proprietary PRINT and TRIA platforms, Liquidia Corporation (NASDAQ:LQDA), a clinical-stage pharmaceutical company, focuses on developing therapies for pulmonary arterial hypertension and related cardiopulmonary diseases.
Hedge Fund Resource Center