On February 5, J.P. Morgan shared its views on trends that are expected to define healthcare in 2026. The firm shed light on the biopharma segment, which is entering 2026 with renewed momentum and a compelling case for investors paying attention. After a slower stretch, mergers and acquisitions are picking back up and for good reason. Many major biopharma companies are sitting on a ticking clock: patents for some of their biggest drugs are set to expire in the coming years, meaning cheaper generics will soon eat into their revenues. To stay ahead, they’re hunting for deals that can keep their pipelines elevated and their growth intact.

The mood across the industry reflects this shift. Investors are feeling more optimistic, particularly about smaller biopharma companies that have solid drugs in development and a clear path to value. Adding to that, biotech and digital health are increasingly converging, with more capital flowing towards companies that combine advanced therapies with data and technology. With more deals expected throughout 2026 and several key clinical results on the horizon, there’s a real opportunity for investors willing to do their homework.

So which biopharma stocks are worth watching right now? Let’s explore our 10 Most Shorted Biotech Stocks to Buy According to Hedge Funds.

Our Methodology

To identify relevant stocks for this article, we screened U.S.-listed biotechnology companies with market capitalizations above $2 billion. Also, we only shortlisted stocks with a short interest ratio greater than 15%, and at least 15% upside potential according to TipRanks consensus, as of March 6 closing.

Next, we identified the number of hedge funds holding positions in these stocks as of the end of the fourth quarter of 2025. Finally, we selected 10 stocks with the highest number of hedge funds holding stakes and ranked them in ascending order.

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. CRISPR Therapeutics AG (NASDAQ:CRSP)

CRISPR Therapeutics AG (NASDAQ:CRSP) is one of the 10 most shorted biotech stocks to buy according to hedge funds.

On February 17, Morgan Stanley increased its price target on CRISPR Therapeutics AG (NASDAQ:CRSP) from $32 to $33, while maintaining an Underweight rating on the stock.

The firm updated its estimates for CRISPR Therapeutics AG (NASDAQ:CRSP) and evaluated additional pipeline advancements after its partner Vertex Pharmaceuticals (VRTX) disclosed fourth-quarter sales data of Casgevy.

On February 13, Needham increased the firm’s price target on CRISPR Therapeutics AG (NASDAQ:CRSP) from $80 to $82. The firm maintained its Buy rating on the shares that offer more than 45% upside potential after the revision.

Following the company’s Q4 results, the firm noted that Casgevy generated $116 million in sales in 2025, surpassing Vertex’s previously stated target of approximately $100 million. The stronger-than-expected sales performance highlights early commercial traction for the therapy, supporting a positive outlook for the company.

CRISPR Therapeutics AG (NASDAQ:CRSP) is a gene editing company developing potentially curative medicines for serious diseases. Their groundbreaking therapy CASGEVY targets sickle cell disease and blood disorders, while their broader pipeline tackles cancer, autoimmune conditions, and diabetes. This has positioned them as a leader in the future of genetic medicine.

9. Apogee Therapeutics Inc. (NASDAQ:APGE)

Apogee Therapeutics Inc. (NASDAQ:APGE) is one of the 10 most shorted biotech stocks to buy according to hedge funds.

On March 3, Wedbush increased its price target on Apogee Therapeutics Inc. (NASDAQ:APGE) from $90 to $95. The firm maintained an Outperform rating on the stock, which yields 30% upside potential at the current level.

Apogee Therapeutics Inc. (NASDAQ:APGE) announced its earnings and reaffirmed its March guidance on 52-week Phase 2 APEX study data. The firm expects the induction data for the dose-ranging trial in the second quarter of 2026, following the previous exposure-response data. Wedbush expects the Phase 3 trials to begin in the second half of the year, with further upside from APG279 in the latter half.

On March 2, Apogee Therapeutics Inc. (NASDAQ:APGE) reported a FY25 net loss of $255.8 million, compared to a net loss of $182.1 million during the prior year. Michael Henderson, M.D., Chief Executive Officer, stated:

In the last 12 months we made meaningful progress across our pipeline, including advancing zumilokibart with positive APEX Phase 2 Part A results, as well as proof-of-concept data from our Phase 1b trial in asthma, we are now focused on proving out the potential of zumilokibart in AD with the APEX Phase 2 Part A 52-week maintenance readout expected in March, followed by the APEX Phase 2 Part B dose optimization readout expected in the second quarter and Phase 3 initiation targeted by year end. Later this year, we plan to provide additional details on development for expansion indications including asthma and EoE, further advancing our vision for zumilokibart as a pipeline-in-a-product. In the second half of 2026, our expected head-to-head readout of APG279 compared to DUPIXENT has potential to be the first proof-of-concept for Apogee’s combination programs in AD. With a cash runway into the second half of 2028, we believe we are well positioned to work toward launching a transformative therapy this decade as we build a leading I&I biotech.

Apogee Therapeutics Inc. (NASDAQ:APGE) is a clinical-stage biotechnology company that develops novel biologics to cure inflammatory and immune diseases. These include atopic dermatitis, asthma, chronic obstructive pulmonary disease, eosinophilic esophagitis, and others. Its existing pipeline includes APG777, APG279, APG990, APG333, and APG808, all in different clinical trial stages.

8. Tango Therapeutics Inc. (NASDAQ:TNGX)

Tango Therapeutics Inc. (NASDAQ:TNGX) is one of the 10 most shorted biotech stocks to buy according to hedge funds.

On March 6, Wedbush increased the firm’s price target on Tango Therapeutics Inc. (NASDAQ:TNGX) from $15 to $19 following the company’s fourth quarter financial results and corporate updates. The firm maintained an Outperform rating on the shares, with a price target indicating an upside of more than 12%.

Wedbush noted that vopimetostat, a protein arginine methyltransferase 5 inhibitor, remains on track to enter its first pivotal study in 2026. The planned trial will evaluate the therapy in second-line pancreatic ductal adenocarcinoma.

On February 23, Mizuho initiated coverage of Tango Therapeutics Inc. (NASDAQ:TNGX) with an Outperform rating and $19 price target. The firm believes that the company’s lead precision oncology candidate, vopimetostat, has the potential for “first-in-class and best-in-class” opportunities as monotherapy and in combination with RAS(ON) inhibitors for pancreatic ductal adenocarcinoma and non-small cell lung cancer.

Mizuho estimates that the company could generate $1.8 billion in risk-adjusted worldwide sales of vopimetostat by 2035. It also anticipates positive Phase I data in 2026, which will result in “significant outperformance” of the shares.

Tango Therapeutics Inc. (NASDAQ:TNGX) is a precision oncology company dedicated to finding targeted treatments for cancer patients who currently have limited options. Their pipeline zeroes in on specific genetic vulnerabilities in tumors, with promising therapies in clinical trials targeting tough-to-treat cancers like pancreatic cancer, lung cancer, and glioblastoma.

7. Viking Therapeutics Inc. (NASDAQ:VKTX)

Viking Therapeutics Inc. (NASDAQ:VKTX) is one of the 10 most shorted biotech stocks to buy according to hedge funds.

On February 12, Michael Ulz from Morgan Stanley reduced his price target on Viking Therapeutics Inc. (NASDAQ:VKTX) from $102 to $99. The analyst reaffirmed an Overweight rating on the stock, which still offers more than 200% upside potential despite the downward revision.

On February 12, Viking Therapeutics Inc. (NASDAQ:VKTX) reported cash & equivalents and short-term investments of $706 million as of December 31, 2025, compared to $903 million at December 31, 2024. CEO Brian Lian described the year as exceptional, with considerable progress in the obesity pipeline.

Viking Therapeutics Inc. (NASDAQ:VKTX) launched the Phase 3 VANQUISH program to evaluate the efficacy of subcutaneous VK2735, a GLP-1/GIP dual agonist, for the management of obesity. Enrolment in the VANQUISH-1 study was completed in the fourth quarter of the year. Enrolment in the VANQUISH-2 study is expected to be completed this quarter. Viking reported positive results from the Phase 2 VENTURE-Oral study of VK2735 in tablet form. The Phase 3 development will begin in the third quarter of 2026.

Viking Therapeutics Inc. (NASDAQ:VKTX) specializes in therapies for metabolic and endocrine disorders. As a clinical-stage biopharmaceutical company, they direct their research efforts towards small-molecule drugs to cure obesity, fatty liver, and diabetes.

6. TG Therapeutics Inc. (NASDAQ:TGTX)

TG Therapeutics Inc. (NASDAQ:TGTX) is one of the 10 most shorted biotech stocks to buy according to hedge funds.

On February 26, TG Therapeutics Inc. (NASDAQ:TGTX) reported Q4 revenue of $192.6 million compared with consensus estimates of $193.3 million. In a statement by their CEO, Michael Weiss, 2025 marked a good year for TG Therapeutics, especially with the momentum and organization of BRIUMVI.

The company registered substantial year-over-year growth in the U.S. and globally, driven by increased adoption and availability, while also advancing its late-stage clinical programs and strengthening its financial foundation. As it begins 2026, it continues to build on this foundation with good financial guidance, several key clinical milestones ahead, and a disciplined approach to operating the business, thus enabling it to continue delivering value to patients, healthcare providers, and shareholders.

Back on February 2, a couple of weeks before the earnings results came out, JPMorgan analyst Brian Cheng reduced the firm’s price target on TG Therapeutics Inc. (NASDAQ:TGTX) to $46 from $49. The analyst maintained his Overweight rating on the stock, with a revised upside potential of more than 57%.

TG Therapeutics Inc. (NASDAQ:TGTX) is a commercial-stage biopharmaceutical company dedicated to transforming the treatment landscape for B-cell mediated diseases. They specialize in acquiring, developing, and commercializing innovative therapies, such as BRIUMVI, to help patients manage autoimmune conditions such as multiple sclerosis. By precisely targeting B-cell disorders, they aim to improve patient outcomes and quality of life.

5. Travere Therapeutics Inc. (NASDAQ:TVTX)

Travere Therapeutics Inc. (NASDAQ:TVTX) is one of the 10 most shorted biotech stocks to buy according to hedge funds.

On February 19, Travere Therapeutics Inc. (NASDAQ:TVTX) released the fourth quarter earnings report. The company registered U.S. net product sales figures of $126.6 million for the quarter, relative to $73.5 million during the fourth quarter of 2024. This translates into full-year U.S. net product sales of $410.5 million, exhibiting almost 82% year-on-year growth. Such impressive figures were attributable to FILSPARI’s sales growth.

The company reported $2.7 million in net income for the quarter, a significant jump from a net loss of $60.3 million in Q4 2024. Moreover, it held $322.8 million in cash & equivalents and marketable securities balance as of December 31, 2025. This balance is expected to elevate further during the first half of 2026, as the company anticipates a $25 million sales-based milestone payment from Mirum Pharmaceuticals.

On February 6, a couple of weeks prior to the earnings announcement, Piper Sandler increased the price target on Travere Therapeutics Inc. (NASDAQ:TVTX) from $35 to $38. The firm maintained its Neutral rating on the stock, with an adjusted upside potential of almost 40% at the current level. The adjustment came as the firm reviewed and updated its estimates for several commercial companies following several fourth-quarter pre-releases and ahead of the quarterly announcements.

Travere Therapeutics Inc. (NASDAQ:TVTX) is a biopharmaceutical company dedicated to identifying, developing, and delivering life-changing therapies for people living with rare kidney and metabolic diseases. By focusing on conditions with high unmet needs, such as IgA nephropathy and cystinuria, they strive to set new standards of care for patients.

4. Dianthus Therapeutics Inc. (NASDAQ:DNTH)

Dianthus Therapeutics Inc. (NASDAQ:DNTH) is one of the 10 most shorted biotech stocks to buy according to hedge funds.

On March 4, Guggenheim increased the price target on Dianthus Therapeutics Inc. (NASDAQ:DNTH) to $200 from $100. The firm maintains its Buy rating on the stock with an upside potential of almost 207%.

The adjustment follows updates to the firm’s model, which raised its estimates for claseprubart. Guggenheim now projects approximately $2.8 billion in global peak sales from CIDP patients and estimates around $2 billion in global sales from the gMG indication.

On January 29, Oppenheimer increased its price target on Dianthus Therapeutics Inc. (NASDAQ:DNTH) to $125 from $62 while maintaining an Outperform rating. The firm points out that Dianthus shares have gained 22% year to date, compared with XBI’s 5% rise. This is primarily due to the comments from CEO Marino Garcia during the January healthcare conference on the potential superiority of the company’s product over the competitor’s complement inhibitors.

Dianthus Therapeutics Inc. (NASDAQ:DNTH) is a clinical-stage biotechnology company dedicated to transforming the treatment of severe autoimmune and inflammatory diseases. They specialize in engineering highly selective monoclonal antibodies, such as their lead candidate claseprubart, to improve upon existing complement therapies. Their focus is on delivering potent, patient-friendly, and convenient treatment options.

3. BioCryst Pharmaceuticals Inc. (NASDAQ:BCRX)

BioCryst Pharmaceuticals Inc. (NASDAQ:BCRX) is one of the 10 most shorted biotech stocks to buy according to hedge funds.

On March 2, Wedbush analyst Laura Chico increased the firm’s price target on BioCryst Pharmaceuticals Inc. (NASDAQ:BCRX) to $22 from $21. The analyst maintained her Outperform rating on the stock. Although the company had previously preannounced its fourth quarter results and FY26 guidance, additional details were provided following the completion of the Astria Therapeutics acquisition. Management maintained its forward guidance for FY26, along with the peak revenue targets.

Chico views the company’s commercial business as operating smoothly, with additional data from BCX17725 expected by the end of 2026. She continues to view the current setup for BioCryst shares favorably based on the company’s ongoing commercial performance.

On February 26, BioCryst Pharmaceuticals Inc. (NASDAQ:BCRX) reported its fourth quarter EPS of $1.12 compared to a loss of 13c in 2024. The company posted quarter revenues of $406.5 million, up from $131.5 million during the same period last year. Charlie Gayer, President and Chief Executive Officer of BioCryst, stated:

2025 was fundamentally transformative for BioCryst Pharmaceuticals Inc. (NASDAQ:BCRX). We achieved full-year profitability for the first time in the company’s history, driven by strong commercial execution that delivered the highest level of new patient prescriptions in the U.S. since the initial launch of ORLADEYO, even as the treatment landscape continued to evolve. We also advanced key business development initiatives that streamlined our operations and further strengthened our leadership position in hereditary angioedema. We entered 2026 with strong momentum, completing the acquisition of Astria Therapeutics to grow our HAE portfolio to meet the needs of more patients, while adding to our long-term growth trajectory well into the next decade.

BioCryst Pharmaceuticals Inc. (NASDAQ:BCRX) is a biotech company that creates treatments for rare and hard-to-treat diseases. Their biggest products help people manage influenza and hereditary angioedema. They also have several promising new medicines in clinical trials, working alongside major pharmaceutical partners to bring more breakthrough treatments to patients.

2. Apellis Pharmaceuticals Inc. (NASDAQ:APLS)

Apellis Pharmaceuticals Inc. (NASDAQ:APLS) is one of the 10 most shorted biotech stocks to buy according to hedge funds.

On March 5, Anupam Rama from JPMorgan increased the price target on Apellis Pharmaceuticals Inc. (NASDAQ:APLS) from $36 to $37. The analyst reiterated his Overweight rating on the stock, which currently offers an adjusted upside potential of more than 84%.

Rana reflected on a recent survey conducted by the firm, involving 23 nephrologists. It revealed that the company’s prescription medication for Paroxysmal Nocturnal Hemoglobinuria, Empaveli, is well placed for “meaningful” market share gains.

Back on February 25, Wedbush decreased the firm’s price target on Apellis Pharmaceuticals Inc. (NASDAQ:APLS) from $20 to $18. The firm maintained its Neutral rating on the stock.

Wedbush noted that the fourth-quarter report for Apellis Pharmaceuticals Inc. (NASDAQ:APLS) largely aligned with consensus expectations, as key results had already been preannounced in January. Looking ahead, management expects Syfovre pricing to remain flat through fiscal year 2026 and anticipates limited growth potential.

Apellis Pharmaceuticals Inc. (NASDAQ:APLS) is a biopharmaceutical company dedicated to tackling diseases that currently have few or no effective treatment options. Their key products help patients with rare blood disorders and vision-threatening eye conditions. They also have several innovative treatments in development, including cutting-edge gene editing approaches, backed by strong industry collaborations.

1. Madrigal Pharmaceuticals Inc. (NASDAQ:MDGL)

Madrigal Pharmaceuticals Inc. (NASDAQ:MDGL) is one of the 10 most shorted biotech stocks to buy according to hedge funds.

On February 20, Bank of America Securities lowered the price target on Madrigal Pharmaceuticals Inc. (NASDAQ:MDGL) from $570 to $529, resulting in upside potential above 22%. The firm maintained its Neutral rating on the stock.

Following the company’s quarterly results and the associated call, the firm modestly lowered its financial forecasts. The adjustment incorporates management’s comments regarding gross-to-net adjustments.

Back on February 19, Madrigal Pharmaceuticals Inc. (NASDAQ:MDGL) reported Q4 EPS of $2.57 with revenue of $321.083 million, modestly above consensus. Bill Sibold, Chief Executive Officer of Madrigal, stated:

“2025 marked a defining year for Madrigal Pharmaceuticals Inc. (NASDAQ:MDGL). We solidified our position as the undisputed leader in MASH highlighted by nearly $1 billion in Rezdiffra sales in its first full year of launch. And we’re just getting started – having penetrated only a fraction of a market that we believe has decades of growth ahead. We believe 2026 will be even more exciting where we expect another year of robust net sales growth driven by broad first-line access, increasing disease awareness and the outstanding real-world experience with Rezdiffra reported by patients and providers.”

Madrigal Pharmaceuticals Inc. (NASDAQ:MDGL) is a biopharmaceutical company with a sharp focus on tackling a serious and underserved liver disease called MASH. Their flagship product, Rezdiffra, works directly on the liver to address the root causes of the condition, offering patients much-needed attention in an area where effective therapies have long been lacking.

While we acknowledge the potential of MDGL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MDGL and that has 100x upside potential, check out our report about this cheapest AI stock.

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