In this article, we will take a look at some of the most promising biotech stocks to buy according to hedge funds.
If there’s one sector that is gaining popularity each day, it’s definitely the biotechnology market. For the past few years, this sector has appeared to be one of the most dynamic and rewarding in the stock market.
From record-breaking advancements in gene therapy and precision medicine to novel drug development, biotech gems perfectly combine healthcare with innovation, and where there’s innovation, there’s potential. For investors focused on growth opportunities and outsized returns, such stocks represent more than the general perception; they are the lighthouses in the healthcare industry.
As stated in a Wellington publication,
Today, small- and mid-cap biotech companies are the vanguard of biopharmaceutical innovation, accounting for two-thirds of the industry’s research and development (R&D) pipeline, with steadily growing share.
Given this, we will discuss some of the best most promising biotech stocks.
Our Methodology
We sifted through stock screeners and financial media to identify the most promising biotech stocks to buy according to hedge funds. We then selected the stocks that were the most popular among hedge funds and the ones that analysts recommended. The stocks are ranked in ascending order according to the number of hedge fund holdings in them, as data extracted from Insider Monkey’s Q2 2025 database.
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).
7. BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)
Number of Hedge Fund Holdings: 58
In the second quarter, Tealwood Asset Management Inc. expanded its holdings in BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) by 37.4%. After the purchase of 5,874 shares, the fund now owns 21,563 shares of the company’s stock, translating to an investment worth $1,185,000.
Three words best describe the future of BioMarin Pharmaceutical Inc. (NASDAQ:BMRN): valuation, growth, and pipeline. With the U.S. healthcare system in the limelight, particularly due to it being the most expensive system, the company’s position remains fairly unaffected since it generates merely 34% of revenues from this market.
Regarding the third characteristic, the pipeline, BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) has several key candidates to support the bullish stance. If we consider Palynziq, the candidate has the largest addressable market and is already authorized for commercialization in adults. According to some estimates, 1 in 10,000 to 15,000 people have phenylketonuria (PKU) worldwide, with Mordor Intelligence expecting a 9.38% CAGR between 2025 and 2030 for the drug.
BioMarin Pharmaceutical Inc. (NASDAQ:BMRN), headquartered in San Rafael, California, is a biotechnology company providing solutions for serious and rare diseases and medical conditions. Incepted in 1996, the company is committed to changing the lives of many.
6. Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY)
Number of Hedge Fund Holdings: 58
During the second quarter, Wealth Enhancement Advisory Services LLC trimmed its position in Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) by 64.5% through the offloading of 9,286 shares. According to the latest filing with the SEC, the institutional investor now owns 5,118 shares of the company’s stock, worth $1,699,000.
It’s truly exciting to see the company’s robust clinical productivity and commercial execution continuing to differentiate it from the others. With such a performance, Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) is well-positioned to achieve over $1 billion in quarterly revenue by the year-end and more than $1 billion in adjusted earnings in the upcoming year.
Keeping in view the stock’s one-year performance, which has outperformed the market by nearly 50%, Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) appears to be widely followed and highly regarded. All thanks to the successful launch of Amvuttra in TTR-CM, the company is now enjoying higher revenues with strong prospects for its long-term position in the TTR space.
Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) is a Massachusetts-based company that engages in therapeutics based on ribonucleic acid interference. Incepted in 2002, the company is committed to building a top-class biopharmaceutical company founded on RNAi.
