On July 8, Jared Holz, Mizuho, joined ‘Closing Bell Overtime’ on CNBC to discuss if the biotech sector is ready for a breakout. Jared Holz admitted that the biotech sector has been exceptionally difficult to predict, largely due to the sheer number of publicly traded stocks that, in aggregate, don’t present a clear unified trend, featuring both many negative and many positive elements. For this reason, he noted the challenge in making a broader industry call. However, Holz observed that the sector was beginning to trade a little bit better, making higher lows and no longer declining indiscriminately every day as it had for a long time. He believes that all the negative factors, such as pricing pressure, competition, and the volume of assets in the publicly traded arena, are now well understood and digested by the market, signaling that it’s time for a move higher.
He also confirmed that his call for a biotech breakout was his analysis and was also influenced by a turning tide in investor sentiment. He stated that investor conversations had become far more bullish over the past couple of months. He attributed this shift partly to discussions about the pharma dilemma, likely referring to the need for pharma companies to acquire new assets, partly to actual M&A activity, and partly to improved clinical data. He also mentioned that while he doesn’t believe interest rates are super tied to this sector, others do, and they anticipate rates will decline over time, contributing to the bullish sentiment. Additionally, he noted the technical indicators, observing that the biotech index had stopped declining regardless of whether the broader market was up or down, which indicates a better place for the sector.
That being said, we’re here with a list of the 10 biotech stocks to buy according to Wall Street analysts.
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Our Methodology
We sifted through the Finviz stock screener to compile a list of the top 10 biotech stocks with an upside potential of over 25% as of July 30. The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q1 2025, which was sourced from Insider Monkey’s database.
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).
10 Biotech Stocks to Buy According to Wall Street Analysts
10. Apellis Pharmaceuticals Inc. (NASDAQ:APLS)
Number of Hedge Fund Holders: 43
Average Upside Potential as of July 30: 68.42%
Apellis Pharmaceuticals Inc. (NASDAQ:APLS) is one of the biotech stocks to buy according to Wall Street analysts. On July 29, Apellis announced that the US FDA approved EMPAVELI (pegcetacoplan) as the first treatment for C3 glomerulopathy (C3G) or primary immune complex membranoproliferative glomerulonephritis (IC-MPGN) in patients 12 years of age and older.
This approval aims to reduce proteinuria in patients with these rare kidney diseases, which affect ~5,000 people in the US and ~8,000 in Europe. These conditions often lead to kidney failure within 5 to 10 years of diagnosis, and around 90% of kidney transplant patients with C3G experience disease recurrence. The approval is based on positive six-month results from the Phase 3 VALIANT study (NCT05067127), the largest single trial conducted in these patient populations, including both pediatric and adult patients with native and post-transplant kidneys.
EMPAVELI demonstrated efficacy by meeting its primary endpoint with a 68% reduction in proteinuria compared to placebo. EMPAVELI is a targeted C3 therapy that works by regulating excessive activation of the complement cascade, a part of the body’s immune system.
Apellis Pharmaceuticals Inc. (NASDAQ:APLS) is a commercial-stage biopharmaceutical company that discovers, develops, and commercializes novel therapeutic compounds to treat diseases with high unmet needs.
9. Liquidia Corporation (NASDAQ:LQDA)
Number of Hedge Fund Holders: 39
Average Upside Potential as of July 30: 70.07%
Liquidia Corporation (NASDAQ:LQDA) is one of the biotech stocks to buy according to Wall Street analysts. Earlier on June 27, BTIG adjusted its price target for Liquidia from $45 to $40 while maintaining a Buy rating. The revision followed BTIG’s attendance at the United Therapeutics Corp. (NASDAQ:UTHR) versus Liquidia ‘327 Hatch Waxman trial in Delaware earlier that week.
Although BTIG still believes Liquidia has favorable odds of prevailing against United’s ‘327 patent, the firm reduced the probability of success for Liquidia’s drug, Yutrepia, in treating pulmonary hypertension associated with interstitial lung disease (PH-ILD) to 85% from 99% to better reflect the unresolved legal risk.
Key business developments for Liquidia include preparations for the potential launch of its first internally developed commercial product, Erepia, for pulmonary arterial hypertension and PH-ILD. The company received a favorable court ruling on May 8 earlier this year, dismissing United Therapeutics’ cross-claim, which removed some legal barriers to Erepia’s potential final approval.
However, Liquidia also faces challenges. The company’s revenue for Q1 2025 was only slightly higher than the previous year, and it reported a net loss of $38.4 million for the quarter, which was an increase from the prior year’s loss. There also remains uncertainty regarding potential future legal actions from United Therapeutics, which could impact Erepia’s launch.
Liquidia Corporation (NASDAQ:LQDA) is a biopharmaceutical company that develops, manufactures, and commercializes various products for unmet patient needs in the US.