In this article, we will look at the 5 Best Small-Cap Biotech Stocks to Buy According to Hedge Funds. Please visit 10 Best Small-Cap Biotech Stocks to Buy According to Hedge Funds if you’d like to see an extended list and methodology behind it.
5. Nuvation Bio, Inc. (NYSE:NUVB)
Market Cap: $1.76 billion
Number of Hedge Fund Holders: 40
Nuvation Bio, Inc. (NYSE:NUVB) is one of the best small-cap biotech stocks to buy according to hedge funds. The stock’s price more than doubled from a year ago, up 156.7%, while it registered a 40.79% increase year-to-date. On April 16, Wedbush analyst David Nierengarten maintained a Buy rating on Nuvation Bio with a price target of $11.00.
On April 1, Nuvation Bio announced that it had amended its existing exclusive license agreement for safusidenib with Daiichi Sankyo to include Japan rights, effectively securing exclusive global development and commercialization rights of the investigational medicine. It said the amended agreement enables Nuvation Bio to expand its ongoing pivotal SIGMA study of safusidenib into Japan and provides rights to all previously generated and future data to support further publication of safusidenib results in IDH1-mutant glioma.
Safusidenib is a novel, oral, potent, brain-penetrant, selective inhibitor of mutant IDH1 that is currently being evaluated in the ongoing Phase 3 SIGMA study for the maintenance treatment of patients with IDH1-mutant astrocytoma who have high-risk features following standard-of-care. Results of Phase 1 and Phase 2 single-arm studies have shown that safusidenib has shown encouraging efficacy signals across all IDH1-mutant glioma grades and treatment lines, including durable responses and prolonged progression-free survival that show tumor shrinkage and disease control.
Nuvation Bio, Inc. (NYSE:NUVB) is a global oncology company focused on tackling some of the toughest challenges in cancer treatment to develop therapies that create a profound, positive impact on patients’ lives. The company’s diverse pipeline includes taletrectinib (IBTROZI), a next-generation ROS1 inhibitor; safusidenib, a brain-penetrant IDH1 inhibitor; and an innovative drug-drug conjugate (DDC) program.
4. Wave Life Sciences Ltd. (NASDAQ:WVE)
Market Cap: $1.41 billion
Number of Hedge Fund Holders: 45
Wave Life Sciences Ltd. (NASDAQ:WVE) is one of the best small-cap biotech stocks to buy according to hedge funds. The company’s stock registered a 22.39% growth from a year ago and a 53.04% percent decline year-to-date. Based on analyst consensus, Wave Life Sciences continues to see a Strong Buy Rating from Wall Street analysts with an average price target of $26.15.
On April 15, Wave Life Sciences announced that its board of directors unanimously approved a plan to redomicile the parent company of the Wave Life Sciences group of companies from Singapore to the United States. It emphasized that having Wave’s parent company domiciled in the United States will streamline Wave’s organizational, statutory, and regulatory structure, resulting in administrative efficiencies and reducing dual financial reporting, regulatory, legal, and other compliance costs, among other benefits.
Through Wave Life Sciences’ listing on NASDAQ, the company has already built a substantial presence in the U.S., with the majority of its operations, its corporate headquarters, the majority of its operating assets, including its manufacturing and research and development facilities, along with the majority of its employees, management team, and board of directors being in the United States.
Wave Life Sciences Chief Financial Officer Kyle Moran said the company believes the United States is the best place to enhance shareholder value. He added:
“With several of our investigational therapies showing tremendous potential to become first- and/or best-in-class treatments, now is the right time and becoming a Delaware corporation is the right strategic move for Wave in order to better align our parent company’s domicile with our operations and our people.”
Wave Life Sciences Ltd. (NASDAQ:WVE) is a biotechnology company focused on unlocking the broad potential of RNA medicines to transform human health. Wave’s RNA medicines platform, PRISM, combines multiple modalities, chemistry innovation, and deep insights into human genetics to deliver scientific breakthroughs that treat both rare and common disorders.
3. Biohaven Ltd. (NYSE:BHVN)
Market Cap: $1.65 billion
Number of Hedge Fund Holders: 51
Biohaven Ltd. (NYSE:BHVN) is one of the best small-cap biotech stocks to buy according to hedge funds. The company’s stock price posted a 1.29% year-to-date increase, while it registered a 46.57% decline from a year ago. Based on an analyst consensus by TipRanks, Biohaven has an average price target of $21.44 with a moderate buy rating from analysts.
In March, Biohaven announced the completion of enrollment in a Phase 2 proof-of-concept (PoC) study with its myostatin-activin pathway inhibitor (MAPI), taldefgrobep alfa, which offers the potential to achieve high-quality weight loss in people living with obesity. It said the topline data from the study are expected in the second half of the year.
Biohaven Senior Vice President of Clinical Development Peter Ackerman, M.D., expressed his excitement for the evaluation of taldefgrobep. He said:
“We believe taldefgrobep could represent an important new agent, as monotherapy and in combination with the current standard of care, that can help optimize high-quality weight loss in people living with obesity. New investigational therapies with novel modes of action are critical to maximizing long-term health benefits in people living with overweight and obesity. While there have been great recent advancements in the field of obesity medicine, there is still a lot of work to do in optimizing the management of a complex, heterogeneous condition that affects nearly half of the world’s population. Our team is grateful to the investigators, their staff, and all participants involved in this important study.”
Biohaven Ltd. (NYSE: BHVN) is a biopharmaceutical company focused on the discovery, development, and commercialization of life-changing treatments in key therapeutic areas, including immunology, obesity, neuroscience, and oncology. The company is advancing its innovative therapeutic portfolio, leveraging its proven drug development experience and multiple proprietary drug development platforms.
2. Viridian Therapeutics, Inc. (NASDAQ:VRDN)
Market Cap: $1.51 billion
Number of Hedge Fund Holders: 54
Viridian Therapeutics, Inc. (NASDAQ:VRDN) is one of the best small-cap biotech stocks to buy according to hedge funds. The stock posted a 12.72% increment from a year ago, and a 51.76% year-to-date decline. Based on consensus, Wall Street analysts have an average price target of $32.33 for Viridian Therapeutics.
In March, Viridian Therapeutics announced positive topline data from the elegrobart REVEAL-1 phase 3 clinical trial in patients with active thyroid eye disease (TED). Elegrobart is a subcutaneously delivered, half-life-extended monoclonal antibody targeting the insulin-like growth factor-1 receptor (IGF-1R). REVEAL-1 evaluated two dosing regimens, every four weeks (Q4W) and every eight weeks (Q8W), compared with placebo.
Viridian Therapeutics President and Chief Executive Officer Steve Mahoney expressed excitement in reporting the results. In a statement, he said:
“REVEAL-1 met its primary endpoint with high statistical significance. Elegrobart treatment drove robust proptosis responses in a treatment regimen comprised of as few as three subcutaneous doses. Further, in the Q4W arm, we saw clinically meaningful diplopia responses and diplopia resolution. Currently, the only marketed treatment for TED requires eight intravenous infusions and, despite low market penetration, annualized in 2025 to approximately $2B in revenues. We believe there is a significant opportunity with subcutaneous elegrobart in TED, including the potential to expand the market as an at-home and self-administered treatment option, if approved.”
Viridian Therapeutics, Inc. (NASDAQ:VRDN) is a biopharmaceutical company focused on discovering, developing, and commercializing potential best-in-class medicines for patients with serious and rare diseases. The company’s expertise in antibody discovery and protein engineering enables the development of differentiated therapeutic candidates for validated drug targets and disease-driving mechanisms in autoimmune and rare diseases.
1. uniQure N.V. (NASDAQ:QURE)
Market Cap: $1.08 billion
Number of Hedge Fund Holders:66
uniQure N.V. (NASDAQ:QURE) is one of the best small-cap biotech stocks to buy according to hedge funds. The stock registered a 32.28 percent growth in the past year and a 24.84 percent year-to-date decline.
On March 11, Mizuho Securities upgraded its price target on uniQure to $35 from $12. Similarly, RBC Capital also upgraded its price target on uniQure to $35 from $11 on March 9.
uniQure Chief Executive Officer Matt Kapusta earlier expressed the company’s commitment to engaging with the FDA regarding the approval pathway for its AMT-130 for Huntington’s disease. He said:
“While we have not reached alignment with the FDA on an approval pathway, we remain confident in the strength and durability reflected in our dataset. We are committed to engaging with the FDA to define a clear and efficient path to bring this potentially transformative therapy to Huntington’s disease patients in urgent need for treatments.”
Beyond Huntington’s disease, Kapusta said the company has also made meaningful progress across its broader clinical portfolio and looks forward to additional data readouts later this year.
uniQure N.V. (NASDAQ:QURE) is a leading gene therapy company advancing transformative therapies for patients with severe medical needs such as hemophilia B. The company is now advancing a pipeline of proprietary gene therapies for the treatment of patients with Huntington’s disease, refractory temporal lobe epilepsy, ALS, Fabry disease, and other severe diseases.
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