In this article, we will list the 5 Best Small-Cap Healthcare Stocks to Buy According to Hedge Funds. Please visit 7 Best Small-Cap Healthcare Stocks to Buy According to Hedge Funds if you’d like to see an extended list and the methodology behind it.
5. Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE)
Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) is one of the 7 best small-cap healthcare stocks to buy according to hedge funds.
On March 12, Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) announced that the Phase 3 Enh3ance study of DTX301, an experimental AAV8 gene therapy for the treatment of ornithine transcarbamylase deficiency, yielded favourable findings.
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DTX301-treated patients showed a statistically significant and clinically meaningful 18% decrease in 24-hour plasma ammonia compared to placebo at Week 36 of the randomised, double-blind, placebo-controlled phase of the trial. Throughout Week 36, the average ammonia AUC0-24 remained within the normal range.
Despite appropriate current medication treatment and dietary restriction, eight out of nine patients with abnormal ammonia AUC0-24 at baseline quickly reached normal ammonia levels, which were often maintained during this treatment period.
On March 12, JPMorgan reduced its price target on Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) from $120 to $74. The firm maintained an Overweight rating on the shares. JPMorgan noted that current share levels do not reflect meaningful value for key pipeline assets, including GTX-102.
It added that updated estimates also incorporate reduced expectations for setrusumab following a recent setback, while emphasizing that positive clinical data will be important to drive future upside.
Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) develops novel therapies, with a focus on identifying, acquiring, and commercializing products for rare and ultra-rare genetic diseases. It has a strong emphasis on gene therapy and covers various stages of clinical trials. The company is currently going through high cash burn with the aim of turning profitable from 2027 onwards.
4. Ocular Therapeutix Inc. (NASDAQ:OCUL)
Ocular Therapeutix Inc. (NASDAQ:OCUL) is one of the 7 best small-cap healthcare stocks to buy according to hedge funds.
On March 3, Tazeen Ahmad from Bank of America Securities increased the price target on Ocular Therapeutix Inc. (NASDAQ:OCUL) from $24 to $27 while maintaining a Buy rating on the stock. This results in a revised upside potential of more than 257% for investors.
According to Ahmad, a thorough examination of the Phase 3 SOL1 trial results offers compelling evidence in favour of the approval and risk reduction that the diabetic retinopathy program offers through clarifying important questions.
On March 3, Clear Street raised its price target on Ocular Therapeutix Inc. (NASDAQ:OCUL) from $21 to $28. The firm maintained its Buy rating on the shares. Clear Street cited positive data from the SOL-1 trial, noting the results support Axpaxli’s potential to deliver durable control in wet AMD.
Clear Street added that the therapy could address a key unmet need around dosing intervals, with strong efficacy and a favorable safety profile supporting a more constructive outlook.
Ocular Therapeutix Inc. (NASDAQ:OCUL) focuses on developing and commercializing therapeutics for different eye conditions, including retinal diseases, using its bioresorbable hydrogel-based formulation technology. Its portfolio includes DEXTENZA, AXPAXLI in phase 3 of clinical trial, and OTX-TIC in phase 2 of clinical trial.
3. Soleno Therapeutics Inc. (NASDAQ:SLNO)
Soleno Therapeutics Inc. (NASDAQ:SLNO) is one of the 7 best small-cap healthcare stocks to buy according to hedge funds.
On March 18, Oppenheimer maintained an Outperform rating on Soleno Therapeutics Inc. (NASDAQ:SLNO). The firm reduced its price target from $110 to $80, resulting in a potential upside of more than 166%.
Oppenheimer cited a slower expected U.S. launch ramp and a shift toward a standalone European commercialization strategy. Despite this, it added that its revenue outlook for 2026 remains above consensus, with upcoming catalysts expected to provide support to the shares.
On February 27, Wells Fargo reduced its price target on Soleno Therapeutics Inc. (NASDAQ:SLNO) from $114 to $110 while maintaining an Overweight rating on the stock. The firm argues that the shares are cheap based on the value perspective relative to its projected FY2026 revenue and cash flows.
Wells Fargo shared its stance despite some skepticism about comments on building the pipeline and LCM for Vykat XR, as well as the retirement of the CFO, which detracts from the current-period investor takeaway story.
Soleno Therapeutics Inc. (NASDAQ:SLNO) is a clinical-stage biopharmaceutical company that is involved in developing novel therapies that target rare diseases like Prader-Willi Syndrome. Its leading product is Diazoxide Choline Extended-Release tablets, VYKAT XR. The company began commercialization of VYKAT XR in April 2025, following FDA approval.
2. Mineralys Therapeutics Inc. (NASDAQ:MLYS)
Mineralys Therapeutics Inc. (NASDAQ:MLYS) is one of the 7 best small-cap healthcare stocks to buy according to hedge funds.
On March 13, Bank of America Securities maintained a Buy rating on Mineralys Therapeutics Inc. (NASDAQ:MLYS). The firm increased its price target to $51 from $46, citing recent updates on the clinical development progress of its lead drug, lorundrostat, following the fourth quarter earnings report.
It added that the therapy’s peak sales opportunity in treating uncontrolled hypertension remains underappreciated, supporting a more constructive view on the company’s long-term potential.
On March 13, Mineralys Therapeutics Inc. (NASDAQ:MLYS) Chief Executive Officer Jon Congleton stated that 2025 was a transformative year for Mineralys. The year was marked by significant clinical advancements and important regulatory achievements, as it was able to finish many of the clinical trials.
Congleton highlighted that the results indicate lorundrostat to be of use to people whose hypertension is poorly controlled. He also stated that the company submitted its first NDA for the treatment of adult hypertension at the end of the year, and the FDA’s acceptance of the application marked a significant turning point for the business. This is a significant advancement for Lorundrostat in terms of possible approval and commercialisation.
Mineralys Therapeutics Inc. (NASDAQ:MLYS) engages in the development of therapeutics that target illnesses caused by dysregulated aldosterone. It is working on the development of lorundrostat, an aldosterone synthase inhibitor for cardiorenal conditions. These include chronic kidney disease, hypertension, and obstructive sleep apnea.
1. uniQure N.V. (NASDAQ:QURE)
uniQure N.V. (NASDAQ:QURE) is one of the 7 best small-cap healthcare stocks to buy according to hedge funds.
On March 23, Barclays analyst Eliana Merle reduced the price target on uniQure N.V. (NASDAQ:QURE) from $31 to $25. The analyst reaffirmed an Equal Weight rating on the shares, which still offer a potential upside of more than 69% despite the downward revision.
Although the exit of Vinay Prasad from the FDA could have a positive impact, there are still risks associated with the company’s regulation. According to the analyst, a Phase 3 clinical trial for Huntington’s disease will be required for the company.
On March 11, Mizuho increased the firm’s price target on uniQure N.V. (NASDAQ:QURE) from $12 to $35. The firm upgraded the rating from Neutral to Outperform, which currently offers an upside potential of 137%.
Mizuho cited the recent departure of Dr. Vinay Prasad from the U.S. Food and Drug Administration, noting it could signal a more flexible regulatory environment. It added that this shift may reopen a path toward approval based on existing data or alternative trial designs, supporting a more constructive outlook on the shares.
uniQure N.V. (NASDAQ:QURE) is focused on developing therapeutics for patients suffering from rare and deadly diseases. Its product portfolio includes HEMGENIX, AMT-260, AMT-162, and AMT- 130. It targets various medical conditions such as hemophilia B, Huntington’s disease, mesial temporal lobe epilepsy, and more.
While we acknowledge the potential of QURE to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than QURE and that has 100x upside potential, check out our report about the cheapest AI stock.
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