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10 Biotech Stocks With The Biggest Upside

In this article, we discuss the 10 biotech stocks with the biggest upside. If you want to read about some more biotech stocks with the biggest upside, go directly to 5 Biotech Stocks With The Biggest Upside.

The biotechnology sector has been one of the most profitable growth spaces in the stock market over the past few years. Investors are thus always looking for potential bargains in the industry that might pay off handsomely in the coming years. Amid a macro slowdown and recession fears, these bargains are readily available at much discounted rates, but identifying winners, like Pfizer Inc. (NYSE:PFE), Eli Lilly and Company (NYSE:LLY), and AbbVie Inc. (NYSE:ABBV), from amongst them is a somewhat difficult task. 

Biotechnology is a branch of science that develops products by utilizing biological systems, living creatures, or elements out of them. It encompasses a wide range of fields such as biochemistry, genetics, and molecular biology. Countries like China, Japan, and India have taken favorable initiatives in the field of biotechnology in the past few years. Globally, the government activities are aimed at streamlining the medication regulatory pathway, standardizing clinical studies, and expediting the product approval processes. 

In light of these favorable trends, the industry has explosive growth potential. According to a recent report, the global biotechnology market size is expected to reach $4 trillion by 2030. The analysts are predicting a compound annual growth rate of close to 14% over the forecast period. Biotechnology startups are acquiring robust funding support and venture capital investments, which, in 2021, amounted to $41 billion, an increase of over 11% as compared to the $36.7 billion raised in the previous year. 

Organic factors are driving this growth as well. For example, the British Journal of Cancer predicts that the number of people suffering from cancer in the UK is expected to increase from 2.5 million in 2015 to 4 million by 2030. Per the journal, this would increase the demand for robust and advanced treatment methods for dealing with cancer. The money flowing towards research and development of vaccines has also increased in the past few years, largely as a result of the global panic during the COVID-19 crisis. 

Some exciting trends that investors should keep in mind when considering the biotech sector are the advancements being made in relation to the treatment for Alzheimer’s disease. For example, aducanumab, developed by Biogen, is one such candidate. Personalized medicine is also likely to be a strong focus of biotech firms throughout 2022. Furthermore, with the improvements in biotech, the nanobiotechnology segment is expanding at an annual rate of 15% from 2022 to 2030. 

Even as investments in the biotech space witness a gradual slowdown due to the shift in focus away from medtech towards other sectors in light of a waning pandemic, the fundamentals of the sector remain robust and the biotechnology sphere remains a key driver of innovation and growth in the economy. A recent Endpoint survey revealed that 66% of investors think that biotech will outperform the broader market in 2022. Nearly 58% plan to increase their exposure to the sector this year in anticipation of this growth. 

Our Methodology

The companies that operate in the biotechnology sector and have upcoming products or services with explosive growth potential were selected for the list. The business fundamentals and analyst ratings for the stocks are also discussed to provide readers with some additional insight for their investment decisions. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.

Biotech Stocks With The Biggest Upside

10. Alzamend Neuro, Inc. (NASDAQ:ALZN)

Number of Hedge Fund Holders: N/A  

Alzamend Neuro, Inc. (NASDAQ:ALZN) is an early clinical-stage biopharmaceutical company that focuses on developing various products for the treatment of neurodegenerative and psychiatric disorders. On October 5, Alzamend Neuro, Inc revealed that it has dosed its first healthy adult subject in its Phase IIA multiple ascending dose (“MAD”) study of AL001 in subjects with dementia related to Alzheimer’s.

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Alzamend Neuro, Inc. (NASDAQ:ALZN) with 28,800 shares worth more than $34,000. 

Just like Pfizer Inc. (NYSE:PFE), Eli Lilly and Company (NYSE:LLY), and AbbVie Inc. (NYSE:ABBV), Alzamend Neuro, Inc. (NASDAQ:ALZN) is one of the biotech stocks with the biggest upside heading into 2023. 

9. Virax Biolabs Group Limited (NASDAQ:VRAX)

Number of Hedge Fund Holders: 1  

Virax Biolabs Group Limited (NASDAQ:VRAX) is a biotechnology company that sells, distributes, and markets diagnostics test kits, and med-tech and PPE products for the prevention, detection, diagnosis, and risk management of viral diseases in the field of immunology. On December 6, Virax Biolabs Group declared that their supplier has received an Emergency Use Authorization from the US FDA for their Over-the-Counter COVID-19 Rapid Antigen Test. The tests are ready for sale in the US by the company.

At the end of the third quarter of 2022, 1 hedge fund in the database of Insider Monkey held stakes worth $115,000 in Virax Biolabs Group Limited (NASDAQ:VRAX). 

8. Ampio Pharmaceuticals, Inc. (NYSE:AMPE)

Number of Hedge Fund Holders: 4     

Ampio Pharmaceuticals, Inc. (NYSE:AMPE) is a biopharmaceutical company that focuses on the development of immunomodulatory therapies for the treatment of pain from osteoarthritis in the United States. On March 2, Ampio Pharmaceuticals announced positive data from the modified Intent-to-Treat population in the Company’s AP-013 study, a Phase 3 clinical trial of the company’s lead candidate, Ampion, in patients suffering from severe osteoarthritis of the knee.

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Millennium Management is a leading shareholder in Ampio Pharmaceuticals, Inc. (NYSE:AMPE) with 2.7 million shares worth more than $163,000. 

At the end of the third quarter of 2022, 4 hedge funds in the database of Insider Monkey held stakes worth $204,000 in Ampio Pharmaceuticals, Inc. (NYSE:AMPE), compared to 7 in the preceding quarter worth $581,000.

7. Peak Bio, Inc. (NASDAQ:PKBO)

Number of Hedge Fund Holders: 5 

Peak Bio, Inc. (NASDAQ:PKBO) is a clinical-stage biopharmaceutical company that focuses on developing therapeutics addressing unmet needs in the areas of oncology and inflammation. On November 4, Ladenburg Thalmann analyst Ahu Demir initiated coverage of PeakBio, Inc. (NASDAQ:PKBO) stock with a Buy rating and $15 price target, noting that the company’s lead asset is PHP-303, a 5th-generation neutrophil elastase inhibitor that is Phase 2-ready and will be evaluated in a Phase 2 study for alpha-1 antitrypsin deficient illness.  

Among the hedge funds being tracked by Insider Monkey, Washington-based firm Deerfield Management is a leading shareholder in Peak Bio, Inc. (NASDAQ:PKBO) with 725,000 shares worth more than $7.2 million. 

6. Genmab A/S (NASDAQ:GMAB)

Number of Hedge Fund Holders: 12     

Genmab A/S (NASDAQ:GMAB) develops antibody therapeutics for the treatment of cancer and other diseases primarily in Denmark. In late October, the company announced worldwide net trade sales of $2.05 billion for Darzalex (daratumumab), an anti-cancer monoclonal antibody medication, for the third quarter of 2022, compared with $1.99 billion generated in the previous quarter. The net trade sales were $1.09 billion in the US and $955 million in the rest of the world. 

On November 14, JPMorgan analyst James Gordon maintained an Overweight rating on Genmab A/S (NASDAQ:GMAB) stock and raised the price target to DKK 3,450 from DKK 2,900.

At the end of the third quarter of 2022, 12 hedge funds in the database of Insider Monkey held stakes worth $125 million in Genmab A/S (NASDAQ:GMAB), compared to 6 in the preceding quarter worth $96.4 million.

Among the hedge funds being tracked by Insider Monkey, Boston-based firm Arrowstreet Capital is a leading shareholder in Genmab A/S (NASDAQ:GMAB) with 1.4 million shares worth more than $47 million. 

In addition to Pfizer Inc. (NYSE:PFE), Eli Lilly and Company (NYSE:LLY), and AbbVie Inc. (NYSE:ABBV), Genmab A/S (NASDAQ:GMAB) is one of the biotech stocks with the biggest upside heading into 2023. 

In its Q2 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Genmab A/S (NASDAQ:GMAB) was one of them. Here is what the fund said:

“Genmab A/S (NASDAQ:GMAB) is a creator and developer of human antibody products for the treatment of life-threatening and debilitating diseases. Shares have been volatile this year amid a binding arbitration with Johnson & Johnson to decide key aspects of royalty payments related to nextgeneration multiple myeloma drug, Darzalex FASPROTM. Last quarter, we indicated share weakness in February and early March seemed to overstate the potential negative outcome, especially relative to the additional growth opportunities within Genmab’s promising R&D pipeline. That potential was on display in Q2 when the company reported positive data for its bispecific antibody Epcoritamab, a new drug being developed with AbbVie to treat lymphoma. Bispecific antibodies are recombinant antibodies aimed at two biological targets simultaneously and are an important emerging technology area. The company expects to report further clinical trial updates later this year for another bispecific antibody it has developed with partner BioNTech. This new drug is expected to treat patients with metastatic or unresectable malignant solid tumors who are not candidates for standard therapy. We believe Genmab is establishing itself as one of the clear leaders in bispecifics, which increases our optimism about the long-term value of the company’s R&D platform.”

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Disclosure. None. 10 Biotech Stocks With The Biggest Upside is originally published on Insider Monkey.

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