In this article, we will look at the 12 Cheap Biotech Stocks to Buy Now.
On February 27, Eli Casdin, Casdin Capital CEO, appeared on CNBC’s ‘Closing Bell’ to talk about the biotech sector. Last year was a banner year for biotech, and this year it is off to a slow start, even as Casdin declared the macro backdrop to be among the most favorable in years. Discussing this disconnect, he noted that the sector had also started off slowly last year and then ramped up in the last quarter. We’ve just started getting our feet underneath us, according to him, and while some momentum has slowed, we had about $225 billion in M&A, which put a floor under valuation. He believes that people are just “poking around” now, looking for the next one to bet on.
READ ALSO: 11 Cheap Blue Chip Stocks to Buy According to Analysts AND Top 10 Gene Therapy Stocks to Buy According to Hedge Funds.
Casdin further stated that there is optimism broadly, as we have $200 billion in annual revenue coming off in 2030 for pharma, and they have a trillion-plus in capital to deploy. Talking about AI and biotech, he stated that he likes the idea that AI can eat software, but it cannot eat molecules, which means that you cannot download an antibody and call it a drug. You need a body to take blood out of, and atoms do not care about algorithms. He thus considers AI to be an upgrade engine for biotech, sort of an accelerant supporting the sector.
We also talked about the healthcare sector in a recently published article on the 11 Best Strong Buy Healthcare Stocks to Invest In. Here is an excerpt from the article:
“On February 23, Steven Wieting, CIO Group chief investment strategist, appeared on CNBC’s ‘The Exchange’ to talk about the stock market and the recent price action in stocks. CNBC reported that staples, healthcare, and utilities are all leading, outperforming since January 1 and showing that this is not a one-day trend but has rather been going on since the turn of the calendar. Wieting stated that a lot is going on in the market, with trends showing AI hardware eating software, its effects on the lending industry for software, and several other undercurrents, with healthcare and energy up, the probability of a US strike on Iran, and oil prices picking up sharply at the expense of growth sentiment. He also cited tariffs at 15% and the situation surrounding them.
Talking about healthcare, Wieting stated that he is strongly overweight in healthcare because of how badly it performed and how much policy concern played a role in its deep underperformance, which is now catching up. While it is not a wonderful year-to-date performer, he thinks that there is more there, and cited its low correlation to tech and the circumstances there.
Wieting also talked about the shifting AI sentiment, stating that the market narrative has generally gone quite negative on the broader impact of AI, with the market pricing in the ongoing AI infrastructure boom while associated applications drive considerable declines in business costs. He further said that there are likely to be mistakes and exaggerations within the market sentiment associated with AI.”
Keeping these trends in the biotech sector in view, let’s look at the best cheap biotech stocks to buy now.
Our Methodology
We sifted through the Finviz stock screener to compile a list of the best biotech stocks with a forward P/E below 15 and selected the top 12 most popular among elite hedge funds as of Q3 2025. We sourced the hedge fund data from Insider Monkey’s database. The stocks are ranked in ascending order of hedge fund sentiment.
Note: All data was recorded on February 28.
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).
12 Cheap Biotech Stocks to Buy Now
12. Innoviva, Inc. (NASDAQ:INVA)
Innoviva, Inc. (NASDAQ:INVA) is one of the best cheap biotech stocks to buy now. Cantor Fitzgerald lifted the price target on Innoviva, Inc. (NASDAQ:INVA) to $32 from $31 on February 26, maintaining an Overweight rating on the shares. The firm told investors in a research note that the fiscal Q4 revenue of $114.6M surpassed expectations, driven primarily by continued XacDuro inventory builds in China, potentially boosting royalties and milestones in 2026+.
The rating update came after Innoviva, Inc. (NASDAQ:INVA) reported its fiscal Q4 and full year 2025 results on February 25, stating that the durable royalties portfolio generated $58.4 million in revenue for fiscal Q4 and $250.3 million for the full year. Management further reported that IST attained U.S. net product sales of $33.9 million for fiscal Q4 and $119.2 million for the full year, reflecting a 47% year-over-year growth. In addition, the IST product portfolio was strengthened with the U.S. FDA approval of NUZOLVENCE®, which is a first-in-class treatment for uncomplicated urogenital gonorrhea. Innoviva, Inc. (NASDAQ:INVA) also initiated a $125 million share repurchase program in fiscal Q4.
Innoviva, Inc. (NASDAQ:INVA) is involved in the development, commercialization, and financial management of biopharmaceuticals.
11. Phathom Pharmaceuticals, Inc. (NASDAQ:PHAT)
Phathom Pharmaceuticals, Inc. (NASDAQ:PHAT) is one of the best cheap biotech stocks to buy now. Guggenheim lifted the price target on Phathom Pharmaceuticals, Inc. (NASDAQ:PHAT) to $25 from $20 on February 27, maintaining a Buy rating on the shares and telling investors that it updated its model to reflect fiscal Q4 financials, and continues to be “encouraged” by the company’s goal to achieve profitability in early Q3 of 2026.
The rating update came after Phathom Pharmaceuticals, Inc. (NASDAQ:PHAT) announced its fiscal Q4 and full-year 2025 results on February 26. It reported over 1.1 million total VOQUEZNA® prescriptions filled to date, and stated that the net revenues for fiscal Q4 came up to $57.6 million and that for FY25 were $175.1 million, reflecting a 217% increase from FY24. Fiscal Q4 operating expenses came up to $55.9 million, with non-GAAP operating expenses of $50.3 million and net cash usage of approximately $5.2 million, reflecting continued expense discipline. Phathom Pharmaceuticals, Inc. (NASDAQ:PHAT) also bolstered its financial position through a $130 million equity offering and modification of term debt.
Phathom Pharmaceuticals, Inc. (NASDAQ:PHAT) is a clinical-stage biopharmaceutical company that develops and commercializes novel treatments for gastrointestinal diseases.
