In this article, we will look at the top 14 Biotech Stocks with High Potential.
On October 1, Evan Seigerman, head of healthcare research at BMO Capital Markets, appeared on CNBC’s “The Exchange” to talk about what the future may be like for healthcare stocks.
Healthcare was the second worst performer this year, with pharma and biotech companies under pressure. However, the market is speculating whether the sector is poised to bring value or is a value trap under increased clarity regarding the Trump administration’s drug pricing efforts.
READ ALSO: 13 Most Undervalued Retail Stocks to Invest In and 13 Most Oversold Large Cap Stocks So Far in 2025.
Discussing this scenario, Seigerman opined that deals could be struck in the domain, which could help the sector. He added that valuations had been suppressed for a long time due to fears regarding drug pricing and tariff implementation. However, some of these fears have been uplifted with the Trump/Pfizer press conference offering a clearer path forward.
Seigerman further stated that while the dwindling uncertainty is a significant positive, it is too early to claim whether the cloud on the sector has fully lifted. It has, however, provided meaningful clarity.
With these trends in view, let’s look at the best biotech stocks with high potential.
Our Methodology
We used stock screeners to make a list of the best biotech stocks with high analyst upside potential and selected the top 13 with the highest upside. We also added the number of hedge fund holders for each stock as of Q2 2025, sourcing the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of analyst upside.
Note: All data was sourced on October 6.
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).
14 Biotech Stocks with High Potential
14. Summit Therapeutics Inc. (NASDAQ:SMMT)
Analyst Upside: 60.99%
Number of Hedge Fund Holders: 30
Summit Therapeutics Inc. (NASDAQ:SMMT) is one of the best biotech stocks with high potential. In a report released on September 29, Leerink Partners maintained a Sell rating on Summit Therapeutics Inc. (NASDAQ:SMMT) without assigning a price target.
In addition, Barclays also maintained a Sell rating on Summit Therapeutics Inc. (NASDAQ:SMMT) on September 25 with a $13 price target.
However, Asthika Goonewardene from Truist Financial maintained a Buy rating on Summit Therapeutics Inc. (NASDAQ:SMMT) the same day, without assigning a price target.
In addition to Asthika Goonewardene, Citi’s Yigal Nochomovitz also expressed bullish sentiments for Summit Therapeutics Inc. (NASDAQ:SMMT) in a report released on September 24, assigning the stock a Buy rating with a $35 price target.
Summit Therapeutics Inc. (NASDAQ:SMMT) is a biopharmaceutical company that specializes in creating novel medications for infectious and cancerous diseases.
13. IDEAYA Biosciences, Inc. (NASDAQ:IDYA)
Analyst Upside: 62.81%
Number of Hedge Fund Holders: 32
IDEAYA Biosciences, Inc. (NASDAQ:IDYA) is one of the best biotech stocks with high potential. On September 23, J.P. Morgan analyst Anupam Rama maintained a bullish stance on IDEAYA Biosciences, Inc. (NASDAQ:IDYA), giving the stock a Buy rating with a $74 price target.
The analyst based the rating on several promising developments associated with the company’s lead asset, darovasertib, stating that IDEAYA Biosciences, Inc. (NASDAQ:IDYA) is anticipated to release notable updates on darovasertib in several treatment settings. This is expected to support significant value creation.
In another report released on September 22, UBS analyst David Dai reiterated a Buy rating on IDEAYA Biosciences, Inc. (NASDAQ:IDYA) and set a price target of $50.00.
IDEAYA Biosciences, Inc. (NASDAQ:IDYA) develops oncology-focused precision medicine, focusing on targeted therapeutics for patients selected using molecular diagnostics. The company’s product candidate is IDE196, a protein kinase C inhibitor that targets genetically defined cancers with GNAQ or GNA11 gene mutations.
