7 Most Promising Biotech Stocks to Buy According to Hedge Funds

Published on September 30, 2025 at 4:46 pm by Rameen Kasana in Hedge Funds, News

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.

5. BridgeBio Pharma, Inc. (NASDAQ:BBIO)

Number of Hedge Fund Holdings: 58

Analysts at Piper Sandler have reaffirmed their ‘Overweight’ rating on BridgeBio Pharma, Inc. (NASDAQ:BBIO) with an unchanged price target of $68, implying an upside potential of nearly 33%. This confidence is driven by the company’s unique efficacy profile that strengthens its launch dynamics.

During the conversation with the research firm’s team, management revealed that third-quarter performance is anticipated to be similar to the second quarter with respect to free-drug distribution and gross-to-net adjustments. What builds the bullish case even stronger for BridgeBio Pharma, Inc. (NASDAQ:BBIO) is the German launch of Beyonttra (Attruby), which appeared stronger than the initial U.S. launch, all of which is due to wide access at approval.

The company’s financials paint an equally attractive picture. While BridgeBio Pharma, Inc. (NASDAQ:BBIO) delivered one-year and three-year returns of 100.67% and 413.98%, respectively, the market returned merely 15.34% and 85.36%, respectively.

BridgeBio Pharma, Inc. (NASDAQ:BBIO) is a California-based commercial-stage biopharmaceutical company developing transformative medicines for people living with genetic diseases and cancers. Founded in 2015, the company offers Attruby and low-dose infigratinib, among others.

4. Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE)

Number of Hedge Fund Holdings: 60

According to a recent disclosure with the SEC, Assenagon Asset Management S.A. lifted its holdings in Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) by a whopping 439.0% during the second quarter. Following the acquisition of 947,865 shares, the firm now owns 1,163,755 shares of the company’s stock, reflecting an investment worth $42,314,000 and ownership of about 1.23%.

During the latest earnings call, management highlighted the company’s history of accelerating programs through approval in several areas. While reporting Breakthrough Therapy designation for GTX-102 in Angelman syndrome, Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) appears to be in a good position to advance UX143, which will be a transformational treatment for pediatric and adult patients with osteogenesis imperfecta.

On September 26, 2025, Regeneron Pharmaceuticals announced the FDA approval of a label expansion for its anti-cholesterol agent Evkeeza, which is offered globally, in collaboration with Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE). This, along with other strategic collaborations, hints at a positive outlook for the company.

Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) is a California-based biopharmaceutical company that discovers, develops, and commercializes novel products for treating rare and ultra-rare genetic diseases. The core offerings of the company include Crysvita (burosumab), Mepsevii, Dojolvi, and Evkeeza (evinacumab).

3. Revolution Medicines, Inc. (NASDAQ:RVMD)

Number of Hedge Fund Holdings: 71

On September 24, 2025, General Counsel and Officer of Revolution Medicines, Inc. (NASDAQ:RVMD), Jeff Cislini, offloaded 1,799 shares of common stock, priced at $44.26 per share. This transaction of $79,623 leaves the ownership of Cislini to 50,425 shares of the company’s stock, including 43,910 restricted stock units.

Just recently, Revolution Medicines, Inc. (NASDAQ:RVMD) reported outstanding Phase 1 data for daraxonrasib in metastatic pancreatic cancer, which showed high response and disease control rates. In contrast to the traditional standards, daraxonrasib demonstrated better efficacy and durability, highlighting promising results in both monotherapy and combination with gemcitabine.

What builds the case even stronger is the company’s $2 billion deal with Royalty Pharma, allowing strong funding as Revolution Medicines, Inc. (NASDAQ:RVMD) accelerates to a transforming Phase 3 trial, which has the potential to completely revolutionize PDAC treatments.

Revolution Medicines, Inc. (NASDAQ:RVMD) is a California-based clinical-stage precision oncology company specializing in novel targeted therapies for RAS-addicted cancers. Incorporated in 2014, the company is focused on developing innovative solutions for people suffering from RAS-addicted cancers.

2. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)

Number of Hedge Fund Holdings: 73

During the second quarter, Generate Investment Management Ltd acquired a new stake in Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) through the purchase of 12,000 shares of the company’s stock. According to a recent disclosure with the SEC, the firm’s investment in the company is approximately $6,300,000 now.

While the company’s returns don’t seem quite compelling, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) has what only a few have. In a noteworthy update, the company posted a Phase 2 COURAGE study on September 17, and to much surprise, garetosmab demonstrated exceptional efficacy in treating fibrodysplasia ossificans progressiva.

We already know that Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) maintains a solid presence in the United States, particularly through the construction of a new manufacturing facility in Rensselaer, along with the deal signed with Fujifilm earlier in April. Given the strong Dupixent growth and a healthy balance sheet, the company is well-positioned for a bright future.

Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is a New York-based company specializing in medicines for treating various diseases. Incorporated in 1988, the company offers EYLEA, myopic choroidal neovascularization, neovascular glaucoma, and Dupixent.

1. Insmed Incorporated (NASDAQ:INSM)

Number of Hedge Fund Holdings: 82

In the second quarter, Public Employees Retirement System of Ohio acquired a new stake in Insmed Incorporated (NASDAQ:INSM) through the purchase of 55,425 shares. According to a recent disclosure with the SEC, the fund’s investment in the company amounts to approximately $5,578,000.

During the presentation at the Morgan Stanley 23rd Annual Global Healthcare Conference, management revealed that Insmed Incorporated (NASDAQ:INSM) witnessed an exceptionally strong 18 months. With the market value growth of about $27 billion, the company maintains its focus on three key franchises, as they call it: ARIKAYCE, brensocatib, and TPIP.

While offering multibillion-dollar compounds, each of these candidates strengthens the company’s business mix. One area Insmed Incorporated (NASDAQ:INSM) is an expert at is identifying an unmet need and then delivering of its top-tier medicines. So, with a characteristic like this, the company is poised for long-term growth.

Insmed Incorporated (NASDAQ:INSM), headquartered in Bridgewater, New Jersey, specializes in therapies for patients with serious and rare diseases. Founded in 1988, the company is committed to transforming the lives of its patients.

While we acknowledge the potential of INSM 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 INSM and that has 100x upside potential, check out our report about this cheapest AI stock.

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Headline NASDAQ:BBIO NASDAQ:ALNY NASDAQ:BMRN NASDAQ:INSM Show more...

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

Published on May 16, 2026 at by Inan Dogan, PhD

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

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At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

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Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

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7 Most Promising Biotech Stocks to Buy According to Hedge Funds

Published on September 30, 2025 at 4:46 pm by Rameen Kasana in Hedge Funds, News

Our Methodology

7. BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)

6. Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY)

5. BridgeBio Pharma, Inc. (NASDAQ:BBIO)

4. Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE)

3. Revolution Medicines, Inc. (NASDAQ:RVMD)

2. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)

1. Insmed Incorporated (NASDAQ:INSM)

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

Published on May 16, 2026 at by Inan Dogan, PhD

Here’s why this is a deal you can’t afford to pass up:

Buy This $3 Stock Now Before the 400% Surge Begins

Published on May 15, 2026 at by Inan Dogan, PhD

Here’s why this is a deal you can’t afford to pass up:

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7 Most Promising Biotech Stocks to Buy According to Hedge Funds

Published on September 30, 2025 at 4:46 pm by Rameen Kasana in Hedge Funds, News

Share

Our Methodology

7. BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)

6. Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY)

5. BridgeBio Pharma, Inc. (NASDAQ:BBIO)

4. Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE)

3. Revolution Medicines, Inc. (NASDAQ:RVMD)

2. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)

1. Insmed Incorporated (NASDAQ:INSM)

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The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

Published on May 16, 2026 at by Inan Dogan, PhD

Here’s why this is a deal you can’t afford to pass up:

Buy This $3 Stock Now Before the 400% Surge Begins

Published on May 15, 2026 at by Inan Dogan, PhD

Here’s why this is a deal you can’t afford to pass up: