In this article, we will take a look at the 10 best Biotech stocks under $10.
The biotech industry saved the world amidst the deadly coronavirus pandemic with their vaccines and treatments. During the COVID-19 pandemic, the stock market saw a resurgence of interest in the healthcare industry, with biotech stocks surging to triple- and quadruple-digit.
The biotech sector is made up of companies that leverage technology to develop and test creative solutions for pressing global issues like disease, food scarcity, and environmental challenges. The industry is at its innovative peak with artificial intelligence, big data, gene engineering, and biomanufacturing playing a huge role in research and development processes.
Post-pandemic, the formally booming sector is now struggling. The biotech industry is currently beginning its second year of underperformance. Biotech stock prices fell about 20% after the first month of 2022 after falling by 25% in 2021.
However, there is now an increasing sense of optimism in the industry as experts speculate a turnaround. Acquisition and merger activities in the biotech sector are on a rise, mostly due to biotech giants like Pfizer Inc. (PFE), Moderna, Inc. (MRNA), and Eli Lilly and Company (LLY), taking advantage of the industry’s valuations’ drop. According to a poll by the financial services company RBC, 66% of investors think the biotech sector would perform better this year. Additionally, 58% of respondents to the survey stated they would “expand their exposure to the sector.”
Biotech Growth
Several companies in the biotech sector offer explosive growth. A whopping 65% of the over 6,000 clinical asset candidates being a development today are from biotech companies, among them, about 2,000 are cell and gene therapies. These cell and gene therapies are projected to play a crucial role in driving revenue growth in the next decade.
While stock valuation in other industries frequently relies on a financial analysis of the business, assessing the stock of a biotech company is a considerably more qualitative exercise. In this industry conducting research and due diligence before making decisions on investments is extremely important. Many stocks in the biotech sector are high-risk, high-reward because the companies have only one or two main products and those main products still need FDA approval. The companies are not profitable because they don’t have any other products on the market.
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Our Methodology
In order to identify the best biotech stocks to buy right now, we are going to use the collective wisdom of nearly 900 hedge funds tracked by Insider Monkey. We started with iShares Biotechnology ETFs with nearly 400 holdings and then sorted these stocks by the number of hedge funds with long positions in each stock. Whenever two stocks have the same number of hedge funds, we used the dollar value of total hedge fund holdings as the tie-breaker. We then found the stocks whose stock prices were under $10.
So, according to hedge funds, here are the 10 best biotech stocks to buy right now:
10 Best Biotech Stocks Under $10
10. CytomX Therapeutics, Inc. (NASDAQ:CTMX)
Number of Hedge Fund Holders: 23
Total Value: $45.81 million
Share Price as of August 30: $1.48
CytomX Therapeutics, Inc. (CTMX) is a clinical-stage biopharmaceutical company that specializes in cancer treatment. The company is restructuring its business to focus on emerging pre-clinical and early clinical pipelines, with a continued alliance on cancer treatment with AbbVie Inc. (NYSE:ABBV), Amgen Inc. (NASDAQ:AMGN), and Bristol-Myers Squibb Company (NYSE:BMY).
When looking at the institutional investors followed by Insider Monkey, Biotechnology Value Fund / BVF Inc, managed by Mark Lampert, holds the biggest position in CytomX Therapeutics, Inc. (NASDAQ:CTMX). Biotechnology Value Fund / BVF Inc has a $10.60 million position in the stock, comprising 0.51% of its 13F portfolio.
In July, Boris Peaker of Cowen downgraded CytomX Therapeutics, Inc. from outperform to market perform with no price target. Peaker remains cautious as the company’s lead drugs are co-owned. Nearing the end of Q3 2022, the biotech company has a market cap of $97.60 million.
According to Insider Monkey’s Q2 data, 23 hedge funds had stakes in CytomX Therapeutics, Inc., compared to 18 in the first quarter of 2022. The total value of the holdings is $45.81 million.
In addition to ImmunoGen, Inc. (NASDAQ:IMGN), Roivant Sciences Ltd. (NASDAQ:ROIV), and IVERIC bio, Inc. (NASDAQ:ISEE), CytomX Therapeutics, Inc. (CTMX) is a biotech stock held by many hedge funds.
9. 89bio, Inc. (NASDAQ:ETNB)
Number of Hedge Fund Holders: 23
Total Value: $73.93 million
Share Price as of August 30: $4.25
89bio, Inc. (NASDAQ:ETNB) is a biotech company that focuses on innovative therapies for liver and cardio-metabolic diseases. With pegozafermin (BIO89-100) as its primary product, the company has a market cap of $166.06 million. On August 11, 89bio, Inc. reported earnings for the fiscal second quarter of 2022. The company reported earnings per share of -$1.23 and beat EPS estimates by $0.06.
As of August 19, 2022, Peter Kolchinsky’s RA Capital Management is the largest shareholder in 89bio, Inc. in our database and holds a stake worth $25.06 million. The investment covers 0.66% of RA Capital Management’s 13F portfolio.
8. CymaBay Therapeutics, Inc. (NASDAQ:CBAY)
Number of Hedge Fund Holders: 23
Total Value: $107.25 million
Share Price as of August 30: $3.49
With significant experience in liver and chronic disease therapeutics, CymaBay Therapeutics, Inc. (NASDAQ:CBAY) is a biotech firm with its headquarters based in California. The firm has a market cap of $295, million and estimated annual revenue near $4.29 million
The company’s lead product seladelpar (MBX-8025), for the treatment of liver diseases, is all set to enter phase 3 trials. On August 11, CymaBay Therapeutics, Inc. reported earnings for the fiscal second quarter of 2022. The company reported earnings per share of -$0.31 and missed EPS estimates by -$0.01. The market for treating Primary Biliary Cholangitis is estimated to be valued at $812.6 million globally in 2022 and is expected to rise to $2.5 billion by 2028.
According to Insider Monkey’s Q2 data, 23 hedge funds had stakes in CymaBay Therapeutics, Inc.. The total value of the holdings is $107.25 million.
7. Mersana Therapeutics, Inc. (NASDAQ:MRSN)
Number of Hedge Fund Holders: 23
Total Value: $187.73 million
Share Price as of August 30: $7.65
Mersana Therapeutics, Inc. (NASDAQ:MRSN), operating out of Massachusetts, U.S, is a biotech firm with a focus on cancer therapeutics. The company specializes in developing and testing antibody-drug conjugate (ADC) therapies. Following the receipt of the FDA’s Orphan Drug Designation, the company stocks rose drastically in May 2022. As of August 2022, the company has a market cap of $743.34 million and estimated annual revenue of 70.69 million.
In July, Collen Kusy of Baird maintained Mersana Therapeutics, Inc. (NASDAQ:MRSN) at outperform rating and raised the price target from $18 to $20. Analysts view Mersana Therapeutics, Inc. (NASDAQ:MRSN)’s strategic partnership with GSK as a very positive development for long term economic benefits.
As of August 22, 2022, Samuel Isaly’s OrbiMed Advisors is the largest shareholder in Mersana Therapeutics, Inc. (NASDAQ:MRSN) in our database and holds a stake worth $41.63 million. The investment covers 0.75% of OrbiMed Advisor’s 13F portfolio.
6. ORIC Pharmaceuticals, Inc. (NASDAQ:ORIC)
Number of Hedge Fund Holders: 24
Total Value: $68.59 million
Share Price as of August 30: $3.59
The California-based biotech firm ORIC Pharmaceuticals, Inc. (NASDAQ:ORIC) specializes in cancer treatments. The company is developing a pipeline of medication for solid tumors and treatment-resistant prostate cancer. Grand View Research’s 2017 market research report projects that by 2025, the market for prostate cancer therapies would be worth $12 billion.
On August 11, 89bio, ORIC Pharmaceuticals, Inc. (NASDAQ:ORIC) reported earnings for the fiscal second quarter of 2022. The company reported earnings per share of -$0.51 and beat EPS estimates by $0.09. The company has a market cap of $142.08 million.
Matthew Biegler, an analyst from Oppenheimer, kept ORIC Pharmaceuticals, Inc. (NASDAQ:ORIC) at perform rating. Analysts view the company’s leadership team with significant expertise in developing oncology drugs as a positive development.
As of August 22, 2022, EcoR1 Capital is the largest shareholder in ORIC Pharmaceuticals, Inc. (NASDAQ:ORIC) in our database and holds a stake worth $15.31 million. The investment covers 0.52% of EcoR1 Capital’s 13F portfolio.
Much like ORIC Pharmaceuticals, Inc., ImmunoGen, Inc., Roivant Sciences Ltd., and IVERIC bio, Inc. are also biotech stocks held by many hedge funds.
5. Nuvation Bio Inc. (NYSE:NUVB)
Number of Hedge Fund Holders: 28
Total Value: $204.89 million
Share Price as of August 30: $2.75
Nuvation Bio Inc. (NYSE:NUVB), a biotech firm situated in New York, aims to create cutting-edge treatments for treatment-resistant cancers. The firm has a market cap of $600.17 million.
On August 22, Robert Burns, an analyst at H.C. Wainwright kept a buy rating and lowered the firm’s price target from $14 to $4.50.
In August 2022, Nuvation Bio declared that it would discontinue the clinical development of NUV-422 and put more emphasis on the development of its small molecule DDC platform and NUV-868.
Avidity Partners Management is the largest shareholder in Nuvation Bio Inc. (NYSE:NUVB). For the second quarter, Nuvation Bio Inc. (NYSE:NUVB) reported earnings per share of -$0.14, missing estimates by $0.03.
4. Kezar Life Sciences, Inc. (NASDAQ:KZR)
Number of Hedge Fund Holders: 28
Total Value: $231.68 million
Share Price as of August 30: $9.84
Based in California, the biotech firm Kezar Life Sciences, Inc. (NASDAQ:KZR) develops therapies for cancer and immunological disorders. The company focuses on using small cell molecules to target diseases. In June, following the release of results from its Phase II clinical trial examining the use of zetomipzomib for the treatment of Lupus Nephritis, Kezar Life Sciences, Inc. (NASDAQ:KZR) shares increased by 92%.
As of August 2022, the company had a market cap of $672.75 million. Suvretta Capital Management is the largest shareholder in Kezar Life Sciences, Inc. (NASDAQ:KZR). For the second quarter, the company reported earnings per share of -$0.25, beating estimates by $0.03.
According to Insider Monkey’s Q2 data, 28 hedge funds had stakes in Kezar Life Sciences, Inc. (NASDAQ:KZR). The total value of the holdings is $231.68 million.
3. ImmunoGen, Inc. (NASDAQ:IMGN)
Number of Hedge Fund Holders: 28
Total Value: $361.65 million
Share Price as of August 30: $5.75
Headquartered in Waltham, Massachusetts, ImmunoGen, Inc. (NASDAQ:IMGN) is a biotech company. The company has a diverse range of therapeutic products for cancers. The company is expecting the FDA decision for mirvetuximab in November. ImmunoGen, Inc. (NASDAQ:IMGN) continues to build strategic partnerships and the company’s deal with Oxford BioTechnologies will support further growth.
RA Capital Management is the largest shareholder in ImmunoGen, Inc. (NASDAQ:IMGN) with shares worth $97.83 million. For the second quarter, the company reported earnings per share of -$0.24, missing estimates by $0.03.
According to Insider Monkey’s Q2 data, 28 hedge funds had stakes in ImmunoGen, Inc. (NASDAQ:IMGN). The total value of the holdings is $361.65 million.
2. Roivant Sciences Ltd. (NASDAQ:ROIV)
Number of Hedge Fund Holders: 28
Total Value: $955.74 million
Share Price as of August 30: $3.50
Roivant Sciences Ltd. (NASDAQ:ROIV) is a biotech company with a pipeline for developing cancer therapeutics and immunological diseases. The company made headlines when it received FDA approval for VTAMA cream on May 24. VTMA cream is the first steroid-free treatment approved by the regulatory body for psoriasis.
Neena Bitritto-Garg, an analyst from Citi, kept a buy rating for the company and raised the target price from $9 to $10. According to the analyst, the product pipeline if moving at the expected pace which is a positive sign for Roivant Sciences Ltd. (NASDAQ:ROIV).
According to Insider Monkey’s Q2 data, 28 hedge funds had stakes in Roivant Sciences Ltd. (NASDAQ:ROIV). The total value of the holdings is $955.76 million.
1. IVERIC bio, Inc. (NASDAQ:ISEE)
Number of Hedge Fund Holders: 41
Total Value: $489.20 million
Share Price as of August 30: $9.99
IVERIC bio, Inc. (NASDAQ:ISEE) is a biotech company that focuses on age-related retinal diseases. The firm has a market cap of $1.18 billion. As of August 2022, Kurt Von Emster’s VenBio Select Advisor is the largest shareholder with shares worth $68.49 million.
Eliana Merle, an analyst from UBS, kept a buy rating for the company with the price target price of $20. If Zimura is effective in the next GATHER2 Phase 3 topline in geographic atrophy expected in September, the analyst is bullish on the company’s prospects.
According to Insider Monkey’s Q2 data, 41 hedge funds had stakes in IVERIC bio, Inc. (NASDAQ:ISEE). The total value of the holdings is $489.20 million.
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This article is originally published at Insider Monkey.
