In this article, we will be taking a look at the 11 Cheap Biotech Stocks to Buy According to Hedge Funds.
Mizuho’s Jared Holz appeared on CNBC’s “Closing Bell Overtime” on July 8 to talk about whether the biotech industry is prepared for a breakthrough. Jared Holz acknowledged that the biotech industry has been particularly challenging to forecast, mostly because of the enormous number of publicly traded equities that, taken as a whole, don’t exhibit a distinct, cohesive trend with a lot of positive and negative aspects. He pointed out that this is why it is difficult to make a call to the industry as a whole.
Holz noted that the industry was starting to trade a little better, hitting higher lows and stopping its daily decline that had been going on for a while. He thinks that the market has fully comprehended and assimilated all of the negative aspects, including pricing pressure, competition, and the volume of assets in the publicly traded arena, indicating that it is time for a move higher.
Additionally, he affirmed that his prediction of a biotech breakout was based on his analysis and was impacted by a shift in investor mood. Over the past few months, he said, investor interactions have been much more upbeat. He ascribed this change in part to real M&A activity, in part to better clinical data, and in part to conversations about the “pharma dilemma,” which probably refers to the necessity for pharmaceutical companies to acquire fresh assets. He added that although he doesn’t think interest rates are particularly linked to this industry, some people do, and they expect rates to drop over time, which adds to the bullish feeling. He also took note of the technical signs, noting that the biotech index had ceased to fall irrespective of whether the overall market was rising or falling, suggesting that the industry was in a better position.
Our Methodology
For our methodology, we first screened for stocks with a forward price-to-earnings (P/E) ratio below 15 and a market capitalization above $2 billion using a stock screener. From this filtered list, we selected the top 10 companies. These were then ranked according to the total number of hedge fund holders in Q2 2025, as reported by the Insider Monkey 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).
Here is our list of the 11 cheap biotech stocks to buy according to hedge funds.
11. Genmab A/S (NASDAQ:GMAB)
Number of Hedge Fund Holders: 19
Genmab A/S (NASDAQ:GMAB), based in Copenhagen, is a biotechnology company focused on developing antibody-based therapies for cancer and other serious diseases. It is among the cheap biotech stocks to buy. With over 45 INDs since 1999 and a pipeline of around 10 programs, the company has contributed to the approval of eight medicines and co-owns products such as Tivdak and Epkinly/Tepkinly, collaborating with major pharma players including Pfizer and AbbVie.
In Q2 2025, Genmab A/S (NASDAQ:GMAB) reported 19% year-over-year revenue growth and a 56% increase in operating profit which was driven by royalties from DARZALEX and Kasimpta, and strong sales of McKinley and Tivdak. The corporation ended H1 2025 with approximately $3 billion in cash, supporting ongoing R&D and growth initiatives. The business also completed a share buyback in June, reflecting confidence in its growth and commitment to shareholders.
Strategically, the firm is accelerating its late-stage pipeline, including the Phase 3 EPCORE FL-1 trial, which met dual primary endpoints in relapsed/refractory follicular lymphoma. The company is intensifying commercial efforts for Epkinly and Tivdak globally and recently increased share capital through employee warrant exercises, signaling continued investment in talent and innovation.
Looking ahead, Genmab A/S (NASDAQ:GMAB) aims to become a fully integrated biotech powerhouse by 2030, leveraging its KYSO antibody platform to deliver transformative therapies. Partnerships with large pharmaceutical companies remain central to strengthening its R&D capabilities and global commercialization reach.
10. Novavax, Inc. (NASDAQ:NVAX)
Number of Hedge Fund Holders: 24
Novavax, Inc. (NASDAQ:NVAX) is a biotechnology company specializing in vaccines for serious infectious diseases, with its leading product, Nuvaxovid™, a recombinant protein-based COVID-19 vaccine approved for adults 65+ and high-risk individuals aged 12–64 in the U.S. The vaccine combines recombinant protein technology with nanoparticle and Matrix-M adjuvant to enhance immune responses.
In August 2025, Novavax, Inc. (NASDAQ:NVAX) received FDA approval for Nuvaxovid’s Biologics License Application, triggering a $175 million milestone payment from partner Sanofi. The company transferred U.S. commercial leadership of Nuvaxovid to Sanofi for the 2025–2026 vaccination season, with further marketing authorization transfers in the U.S. and EU expected later in 2025, generating additional milestone payments.
The business is expanding its pipeline beyond COVID-19, including COVID-19–influenza combination vaccines and a standalone influenza vaccine in Phase 3, showing strong immune responses and T-cell activity. Its H5N1 avian flu candidate also produced promising preclinical results, boosting investor confidence.
Financially, Novavax, Inc. (NASDAQ:NVAX) reported an unexpected net income of $107 million in Q2 2025, aided by milestone payments, cost reductions, and organizational efficiencies. The corporation also refinanced convertible debt in August 2025, improving terms and extending maturities to support pipeline advancement and partnership strategies.
9. Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY)
Number of Hedge Fund Holders: 27
Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY) is a commercial-stage biopharmaceutical company focused on therapies for rare neurological diseases. Its flagship product, WAKIX (pitolisant), treats excessive daytime sleepiness and cataplexy in adults with narcolepsy and recently received FDA approval for Prader-Willi Syndrome, expanding its patient base. The company aims to surpass $1 billion in narcolepsy-related revenue by 2030, supported by patient growth, label expansions including pediatric use, and next-generation formulations.
Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY)’s late-stage pipeline is strong, with ongoing and upcoming Phase 3 trials targeting Prader-Willi Syndrome and Fragile X Syndrome. Given its expanding addressable market and robust clinical development, HRMY is increasingly being mentioned among cheap biotech stocks to buy, as investors seek undervalued opportunities with significant upside. Preclinical data for BP1.15205, a potential best-in-class orexin-2 agonist, showed promising wake-promoting and cataplexy-suppressing effects, with human trials expected to begin in late 2025.
Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY) is currently considered undervalued relative to its growth potential. Analysts project approximately 45% upside as pipeline progress, market opportunities, and label expansions drive long-term growth. The business will participate in the 2025 Cantor Global Healthcare Conference in September, highlighting continued engagement with investors and the broader healthcare sector.
8. Agios Pharmaceuticals, Inc. (NASDAQ:AGIO)
Number of Hedge Fund Holders: 29
Agios Pharmaceuticals, Inc. (NASDAQ:AGIO) is a commercial-stage biopharmaceutical company focused on therapies for rare diseases, particularly in cellular metabolism. Its flagship product, PYRUKYND (mitapivat), targets hemolytic anemias, including sickle cell disease and thalassemia.
In Q2 2025, Agios Pharmaceuticals, Inc. (NASDAQ:AGIO) reported $12.5 million in net revenues from PYRUKYND, up 45% year-over-year, reflecting growing market adoption. The company is preparing for a key FDA regulatory milestone with the PDUFA goal date on September 7, 2025, for PYRUKYND’s supplemental New Drug Application in thalassemia. Topline results from the Phase 3 RISE UP trial in sickle cell disease are expected by year-end 2025, setting the stage for a potential U.S. launch in 2026.
The corporation is also advancing its pipeline with a Phase 2 trial for tebapivat in sickle cell disease and IND clearance for AG-236 targeting polycythemia vera. New clinical data on mitapivat and tebapivat were presented at the 30th European Hematology Association Congress, highlighting ongoing research and collaborations in rare blood disorders.
Despite a net loss of $112 million in Q2 2025 due to increased R&D and commercial spending, the company maintains a strong financial position with $1.3 billion in cash and equivalents to support pipeline development and future launches. Analyst confidence remains high, with Bank of America Securities reaffirming a Buy rating and a $52 price target, reflecting optimism about Agios Pharmaceuticals, Inc. (NASDAQ:AGIO)’ growth trajectory and potential in rare disease therapeutics.
7. Royalty Pharma plc (NASDAQ:RPRX)
Number of Hedge Fund Holders: 30
Royalty Pharma plc (NASDAQ:RPRX) is a leading biopharmaceutical royalty company that invests in and acquires royalty interests in innovative drug products, partnering with biotech firms, pharmaceutical companies, and research institutions. The company funds late-stage clinical trials and new product launches in exchange for future royalty revenues.
In August 2025, the business reported strong Q2 results, with Portfolio Receipts rising 20% to $727 million and Royalty Receipts up 11%, driven by products such as Voranigo, Trelegy, Evrysdi, and Tremfya. Full-year 2025 guidance for Portfolio Receipts was raised to $3.05–$3.15 billion, reflecting expected growth of 9%–12%.
A key milestone was the May 2025 acquisition of its external manager, RP Management, LLC, creating an integrated public company that streamlines operations and combines its royalty portfolio with intellectual capital. For investors exploring growth opportunities in healthcare, particularly beyond cheap biotech stocks to buy, Royalty Pharma plc (NASDAQ:RPRX) stands out by offering exposure to a diversified royalty portfolio rather than relying on individual drug developers. The company also acquired a royalty interest in Amgen’s Imdelltra, a DLL3-targeting bispecific T-cell engager for small cell lung cancer, for $885 million upfront, with options for additional royalties up to $65 million, expanding its oncology portfolio.
Royalty Pharma plc (NASDAQ:RPRX) entered a $2 billion funding partnership with Revolution Medicines for the development of daraxonrasib, a Phase 3 cancer therapy, including a synthetic royalty of up to $1.25 billion while allowing the partner to retain control over pipeline development. Positive clinical updates from partners, including Phase 3 results for Gilead’s Trodelvy in metastatic triple-negative breast cancer, continue to enhance the value and growth potential of the corporation’s royalty assets.
6. Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX)
Number of Hedge Fund Holders: 32
Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) is a commercial-stage biopharmaceutical company specializing in treatments for rare and difficult-to-treat diseases. Its key products include FIRDAPSE (amifampridine), Fycompa, Ruzurgi, and AGAMREE, targeting neurological and rare disorders.
Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX)’s most significant recent development is the settlement of patent litigation with Lupin Ltd and Lupin Pharmaceuticals over FIRDAPSE 10 mg tablets. Announced in August 2025, the agreement delays Lupin’s ability to market a generic version in the U.S. until February 25, 2035, pending FDA approval, while terminating the specific litigation between Catalyst and Lupin. This settlement safeguards the business’s market exclusivity and revenue for nearly another decade, although patent disputes with other generics, like Hetero, remain ongoing.
Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) also reported a 19.4% year-over-year revenue increase in Q2 2025, reflecting expanding market reach and continued commercial momentum. The corporation maintains strategic collaborations and is recognized for its innovative rare disease pipeline, reinforcing its appeal to investors seeking growth in specialty biopharma.
5. ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD)
Number of Hedge Fund Holders: 33
ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) is a biopharmaceutical company specializing in therapies for central nervous system disorders and rare diseases. Its key marketed products include NUPLAZID (pimavanserin) for Parkinson’s disease psychosis and DAYBUE (trofinetide) for Rett syndrome and other rare neurological disorders.
In Q2 2025, ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) reported revenues of $264.6 million, up 9% year-over-year, driven by 7% growth in NUPLAZID sales and 14% growth in DAYBUE sales. The company completed enrollment in its Phase 3 COMPASS study for ACP-101 targeting Prader-Willi Syndrome, with top-line results expected in early Q4 2025, potentially addressing critical unmet needs in rare genetic disorders.
The business showcased its robust pipeline at its inaugural R&D Day, highlighting nine programs, including seven in Phase 2 or Phase 3 and five expected clinical readouts through 2027. For investors looking into cheap biotech stocks to buy, the company also secured two key patent litigation victories, extending NUPLAZID’s market exclusivity with patents valid through 2030 and 2038.
International expansion for DAYBUE is underway, with named patient supply initiated in Europe, Israel, and select other countries. Recent executive hires, including a Senior VP of Rare Disease Franchise and a Chief Information and Data Officer, reflect a focus on leveraging leadership, data, and digital technologies to drive growth.
Positive market response and strategic execution have been reflected in ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD)’s stock, which reached a 52-week high of $25.90 in August 2025, supported by favorable analyst sentiment and multiple price target upgrades.
4. PTC Therapeutics, Inc. (NASDAQ:PTCT)
Number of Hedge Fund Holders: 34
PTC Therapeutics, Inc. (NASDAQ:PTCT) is a biotechnology company focused on developing treatments for rare disorders, including Duchenne muscular dystrophy, AADC deficiency, and phenylketonuria (PKU), with an active pipeline in rare disease research such as Huntington’s disease.
In August 2025, PTCT received FDA approval for Sephience, an oral treatment for PKU, marking a major growth driver. The company’s Q2 revenues totaled $179 million, surpassing expectations, while cash reserves of nearly $2 billion provide financial flexibility for future development.
However, PTC Therapeutics, Inc. (NASDAQ:PTCT) faced a setback with the FDA issuing a Complete Response Letter for vatiquinone, its oral therapy for Friedreich’s ataxia, citing insufficient efficacy evidence and requesting additional studies before resubmission. Management remains committed to continuing clinical development and engagement with regulators.
Strategically, PTC Therapeutics, Inc. (NASDAQ:PTCT) leverages partnerships with major pharma companies like Roche and Novartis to advance its rare disease pipeline. Analysts remain positive on long-term prospects, with average price targets around $68, reflecting confidence in Sephience’s growth potential and ongoing pipeline developments.
3. Halozyme Therapeutics, Inc. (NASDAQ:HALO)
Number of Hedge Fund Holders: 40
Halozyme Therapeutics, Inc. (NASDAQ:HALO) is a biopharmaceutical company specializing in novel drug delivery technologies, primarily its ENHANZE platform, which enhances the efficacy of injectable therapies and generates significant royalty revenue from partnered products.
In Q2 2025, Halozyme Therapeutics, Inc. (NASDAQ:HALO) reported total revenue of $326 million, up 41% year-over-year, driven by a 65% increase in royalties from therapies including DARZALEX SC, Phesgo, and VYVGART Hytrulo. The corporation raised its 2025 revenue guidance to 26–33% growth, reflecting strong global demand for its platform. Recent regulatory milestones, such as approvals for RYBREVANT SC in Europe and new indications for VYVGART Hytrulo, further expand market reach and underscore the value of ENHANZE technology.
For investors looking beyond the big names in the sector, Halozyme Therapeutics, Inc. (NASDAQ:HALO) is often mentioned in discussions of cheap biotech stocks to buy, given its strong royalty base and consistent growth trajectory. The company is also pursuing legal protection of its intellectual property, filing a patent infringement lawsuit against Merck Sharp & Dohme in April 2025 over Keytruda SC. The business completed $303 million in share repurchases in Q2 under a $750 million program, signaling confidence in its growth trajectory.
Analyst sentiment remains positive, with Morgan Stanley upgrading Halozyme to “Overweight” and raising the price target to $80, citing durable royalty streams, expanding geographic and indication reach, and favorable U.S. legislative developments. Strong earnings beats and robust royalty growth have supported the stock reaching all-time highs in mid-2025.
2. Exelixis, Inc. (NASDAQ:EXEL)
Number of Hedge Fund Holders: 43
Exelixis, Inc. (NASDAQ:EXEL) is a biotechnology company focused on therapies for difficult-to-treat cancers, with its flagship product CABOMETYX (cabozantinib) driving growth in advanced renal cell carcinoma and medullary thyroid cancer. The company also maintains a promising oncology pipeline, including candidates such as zanzalintinib and XL309.
In Q2 2025, Exelixis, Inc. (NASDAQ:EXEL) reported revenues slightly below expectations for CABOMETYX, contributing to a modest stock decline. The corporation chose not to pursue the Phase 3 portion of the STELLAR-305 trial for squamous cell carcinoma, prioritizing more commercially promising opportunities.
Pipeline development remains a key focus, with ongoing Phase 1 studies for XL309, XB010, and XB628, and FDA clearance for an IND application for XB371. These efforts aim to diversify Exelixis, Inc. (NASDAQ:EXEL)’ portfolio beyond CABOMETYX. Collaborative partnerships, particularly with Bristol-Myers Squibb for combination therapies in renal cell carcinoma, continue to support market leadership and strategic growth.
1. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
Number of Hedge Fund Holders: 73
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) tops our list for being one of the cheap biotech stocks to buy. It is a biotechnology company developing treatments for serious diseases, including eye conditions, inflammatory disorders, cancer, and rare diseases. Its strong R&D and antibody platform support long-term growth from drugs like Dupixent and new launches in oncology and respiratory care.
In Q2 2025, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) reported strong results driven by Dupixent, which generated $4.34 billion in sales, exceeding expectations. However, Eylea sales declined 25%, and the FDA again declined approval for the blood cancer therapy odronextamab due to manufacturing issues at a third-party facility. The business remains confident that these issues can be resolved, as the drug is already approved in Europe and targets follicular lymphoma.
The company continues to emphasize innovation, awarding its 13th annual Regeneron Prize for Creative Innovation to early-career biomedical researchers and supporting global STEM education initiatives.
Looking ahead, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)’s priorities include resolving regulatory challenges for odronextamab, expanding Dupixent’s market, and advancing new oncology and respiratory launches to sustain growth despite near-term setbacks.
While we acknowledge the potential of REGN to grow, 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 REGN and that has 100x upside potential, check out our report about this cheapest AI stock.
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