5 Best Small-Cap Biotech Stocks with Massive Potential According to Hedge Funds

2. Alkermes plc (NASDAQ:ALKS)

Number of Hedge Fund Shareholders: 44

Alkermes plc (NASDAQ:ALKS) also hit an all-time high in hedge fund ownership during Q2, after steadily becoming more popular among top money managers over the past four years. Alex Denner’s Sarissa Capital Management already owned the largest ALKS stake heading into Q2, but raised the size of it by another 57% during the quarter to just over 14 million shares. The fund’s Alkermes position accounts for 43.7% of the value of its 13F holdings.

Alkermes plc (NASDAQ:ALKS) shares have slid by 26.3% since peaking towards the end of June. Preliminary results from the biopharmaceutical company’s phase 1 trial of narcolepsy treatment ALKS 2680 left investors questioning whether the drug remained active long enough for it to be a viable candidate for other sleep disorders.

Alkermes plc (NASDAQ:ALKS) is in the process of transitioning into a pure-play neuroscience company as it continues working towards the separation of its oncology business. Alkermes grew Q3 revenue by 51% year-over-year to $381 million, while non-GAAP net income jumped by $106 million to $109.5 million. Manufacturing and royalty revenue surged by 182% during the quarter. Piper Sandler maintained an ‘Overweight’ rating on Alkermes following the company’s Q3 earnings results, while Mizuho maintained its ‘Buy’ rating.