In this article, we will be taking a look at the 8 Best Small Cap Pharma Stocks to Buy Right Now.
Despite the concerns surrounding the Iran War, Haig Bathgate, CEO of Callanish Capital, stated on CNBC on May 7 that he was optimistic about global stocks. He said that while short-term market volatility and emotional responses are frequently caused by geopolitical crises, the long-term effects on stocks are minimal. Bathgate stressed the need for a historical perspective, pointing out that investors tend to overreact to crises while ignoring long-term structural factors. According to him, markets are influenced by global energy dynamics, capital expenditure cycles, and AI growth, even though the conflict may temporarily affect certain sectors. Additionally, he pointed out that fundamentals and long-term themes outweighed geopolitical noise, and U.S. markets had significant momentum toward the previous year’s close.
In addition, Citi’s Scott Chronert discussed whether investors should reenter the stock market in the face of uncertainty on CNBC’s “Closing Bell” on March 24. Two market narratives were described by him. Expectations for volatility and risk aversion increased as short-term positioning became defensive as the Iran situation worsened during the preceding three weeks. Recently, lessening tensions have supported a more optimistic market sentiment across stocks and riskier assets.
The intermediate prediction, on the other hand, is more complex and involves careful observation of interest rates, oil prices, currency fluctuations, and general liquidity circumstances. As the fiscal Q1 earnings season approaches, these factors will impact corporate fundamentals, which will impact investor attitude and advice. Long-term trends rely on profitability and macro confirmation, he continued, while short-term relief rallies are possible. He said that investors need to take into account structural growth factors, policy-driven market signals, and geopolitical shocks.
Together, these two analysts present a picture of a market that is impacted by the tension between short-term geopolitical shocks and also long term structural economic factors. Although geopolitical developments can dominate headlines and cause short-term volatility, both perspectives contend that investors are ultimately more concerned with earnings visibility, liquidity conditions, and long-term structural themes like innovation, productivity, and global energy transitions in the current context.
With that said, let’s take a look at the best pharmaceutical stocks.
Our Methodology
For our methodology, we screened for small-cap stocks with market capitalizations between $300 million and $2 billion. From this pool, we selected eight pharmaceutical stocks based on the latest news and developments, and then ranked them in ascending order by their total number of hedge fund holders as of Q4 2025, as tracked by the Insider Monkey 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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Here is a list of the 8 best small-cap pharma stocks to buy right now.
8. Organogenesis Holdings Inc. (NASDAQ:ORGO)
Number of Hedge Fund Holders: 16
Market Capitalization: $310.0 million
Organogenesis Holdings Inc. (NASDAQ:ORGO) is one of the best pharmaceutical stocks on our list.
TheFly reported on May 8 that BTIG downgraded ORGO to Neutral from Buy in a post–first-quarter update, with the price target withdrawn. The revised view reflects a slower-than-expected recovery in the Advanced Wound Care segment, with uncertainty around the timing of improvement. The report highlights that several market headwinds have weighed on the category, including reduced clarity in demand trends, lower utilization levels, and a shift among physicians toward simpler wound treatment options instead of more advanced dressings.
In a separate move, earlier on April 28, Organogenesis Holdings Inc. (NASDAQ:ORGO) completed the full rolling submission of its Biologics License Application to the U.S. FDA for ReNu, a cryopreserved amniotic suspension allograft intended for treating symptomatic knee osteoarthritis.
The filing process began in December 2025, when non-clinical sections were submitted first. With the latest step, the company has now delivered the remaining clinical data package along with chemistry, manufacturing, and controls documentation, finalizing the complete application package for regulatory review.
Organogenesis Holdings Inc. (NASDAQ:ORGO) is a regenerative medicine company that develops and commercializes tissue engineering and cell therapy products for advanced wound care and surgical applications, aiming to improve healing and patient outcomes.
7. Emergent BioSolutions Inc. (NYSE:EBS)
Number of Hedge Fund Holders: 20
Market Capitalization: $429.80 million
Emergent BioSolutions Inc. (NYSE:EBS) is one of the best pharmaceutical stocks to invest in.
TheFly reported on April 30 that EBS announced that Singapore’s Health Sciences Authority approved an expanded use of ACAM2000, allowing its use in preventing mpox in adults considered at elevated risk of infection. The decision broadens the vaccine’s application beyond its prior scope and supports its role in public health preparedness for emerging infectious threats. The company highlighted the approval as evidence of the strength and range of its medical countermeasure portfolio and emphasized continued engagement with global regulatory agencies to expand access to protective and life-saving medical solutions.
Separately, on April 29, Emergent BioSolutions Inc. (NYSE:EBS) announced a multi-year collaboration with SAB Biotherapeutics focused on development and manufacturing support for SAB-142, a clinical-stage candidate for autoimmune type 1 diabetes. The agreement is valued at roughly $50 million, with about $36 million tied to potential regulatory approval and future milestone achievements.
Under the partnership, EBS will provide full-scale development and manufacturing services aligned with current good manufacturing practices, including process optimization, scale-up activities, technology transfer, analytical method support, and clinical supply production. Commercial manufacturing support is also included, contingent on eventual regulatory clearance of the program.
Emergent BioSolutions Inc. (NYSE:EBS) is a global life sciences company that develops and manufactures vaccines, therapeutics, and other medical countermeasures for public health threats like infectious diseases, chemical/biological agents, and opioid overdoses.
6. Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH)
Number of Hedge Fund Holders: 22
Market Capitalization: $807.78 million
Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) is among the best pharmaceutical stocks on this list.
TheFly reported on May 13 that Wells Fargo downgraded AMPH to Equal Weight from Overweight, with the price objective reduced to $19 from $30 in a revised research note. The updated view reflects greater uncertainty around the company’s revenue trajectory for 2026 and 2027, along with reduced confidence in its ability to meet its 2026 outlook. The note also highlighted concerns related to AMP-004, particularly the risk tied to its potential to achieve interchangeability status, which could influence longer-term competitive positioning and growth expectations.
On May 7, Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) reported first-quarter 2026 results for the period ended March 31, 2026, with revenue of $171.2 million versus consensus estimates of $173.4 million. The company highlighted continued progress in strengthening its commercial base and core operations during the quarter. Key developments included the approval and launch of Ipratropium Bromide HFA, alongside broader pipeline advancement supporting long-term strategic growth.
Management also pointed to an expanded product portfolio through an exclusive licensing agreement for a fully synthetic corticotropin compound. The company emphasized ongoing investment in proprietary pipeline assets and internal capabilities aimed at sustaining long-term expansion and operational resilience.
Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) is a biopharmaceutical company that develops, manufactures, and markets complex generic and proprietary injectable, inhalation, and intranasal drugs, mainly serving hospital and emergency care markets.
5. BioAge Labs, Inc. (NASDAQ:BIOA)
Number of Hedge Fund Holders: 24
Market Capitalization: $850.83 million
BioAge Labs, Inc. (NASDAQ:BIOA) is one of the best small cap pharma stocks to buy right now.
TheFly reported on May 13 that BIOA received newly initiated coverage with a Buy rating and a $40 price target by BITG. The company is described as a clinical-stage biopharmaceutical firm targeting diseases associated with human aging through analysis of large human datasets to identify biological markers that influence long-term health outcomes. The outlook highlights a roughly four-year cash runway and upcoming clinical catalysts, including BGE-102 expected in the second half of 2026 and BGE-105 anticipated in mid-2027. The lead cardiovascular risk program is viewed as biologically de-risked based on evidence linking reductions in systemic inflammation with improved clinical outcomes, supporting the firm’s positive stance on the development pipeline.
Additionally, on May 8, BioAge Labs, Inc. (NASDAQ:BIOA) reported first-quarter 2026 financial results for the period ended March 31, 2026, alongside a business update. Collaboration revenue increased to $2.8 million from $1.5 million a year earlier, driven by higher activity under its Novartis agreement.
Research and development expenses rose to $20.4 million, reflecting increased spending on the BGE-102 program, including late-stage Phase 1 completion work, preparation for upcoming Phase 2 cardiovascular risk studies, and expansion into additional proof-of-concept trials. Additional R&D costs were driven by other pipeline programs and manufacturing efforts. General and administrative expenses increased to $7.7 million due to higher personnel costs and legal expenses. Net loss widened to $22.3 million, while cash reserves stood at approximately $384.9 million, supporting operations through 2029.
BioAge Labs, Inc. (NASDAQ:BIOA) is a clinical-stage biopharmaceutical company developing therapies for metabolic and age-related diseases by targeting the biological drivers of aging.
4. Harrow, Inc. (NASDAQ:HROW)
Number of Hedge Fund Holders: 24
Market Capitalization: $1.11 billion
Harrow, Inc. (NASDAQ:HROW) is one of the best pharma stocks.
TheFly reported on May 14 that HROW had its price target reduced by B.Riley to $60 from $65 while a Buy rating was maintained. The update followed first-quarter results that were impacted by weaker pricing for VEVYE and lowered near-term growth expectations. Despite this, the outlook remains supported by improving underlying volume trends and strengthening demand signals across IHEEZO and Triesence. The note also points to upcoming product launches and reimbursement coding catalysts, along with expanding commercial leverage, as factors that could drive stronger second-half performance and support a longer-term path toward higher revenue levels even amid ongoing pricing uncertainty.
On May 11, Harrow, Inc. (NASDAQ:HROW) reported first-quarter 2026 performance with revenue of $44.2 million for the period ended March 31, 2026. Results included a non-recurring revenue adjustment of roughly $8 million linked to updated commercial coverage for VEVYE. The company highlighted record prescription activity for VEVYE despite a decline in the broader branded dry eye market, with demand trends still aligned with expectations for more than $100 million in 2026 revenue.
IHEEZO unit demand rose 18% year over year, driven largely by retina adoption, while TRIESENCE unit demand more than doubled for a sixth consecutive quarter of growth. The company reaffirmed full-year revenue guidance of $350–$365 million and expects second-quarter revenue of $71–$81 million, supported by continued commercial expansion.
Harrow, Inc. (NASDAQ:HROW) is a pharmaceutical company headquartered in Nashville, Tennessee, that specializes in the discovery, development, and commercialization of ophthalmic (eye care) products for the North American market.
3. Phibro Animal Health Corporation (NASDAQ:PAHC)
Number of Hedge Fund Holders: 25
Market Capitalization: $1.43 billion
Phibro Animal Health Corporation (NASDAQ:PAHC) is among the best small cap stocks to invest in.
TheFly reported on May 13 that PAHC had its price objective reduced to $44 from $62 by Citi in a sector research update, with a Neutral rating maintained on the stock. The revision reflects concerns over regulatory pressures affecting the industry as well as valuation compression across comparable companies, which together weighed on the updated outlook for the shares.
Separately, on May 5, Phibro Animal Health Corporation (NASDAQ:PAHC) launched its new Sustainable Solutions Platform (SSP), a companywide initiative aimed at helping livestock, dairy, and pet food producers reduce greenhouse gas emissions through science-based approaches integrated into existing production and feed systems. As part of the rollout, the company introduced Verratain Verified Sustainability Solutions as a master brand for products designed to lower emissions across animal protein and pet food supply chains.
The initial offerings are being developed in partnership with VAXA Technologies and utilize low-carbon microalgae-based feed ingredients. The first products under the Verratain line include Spirulina and Omega Oil, which are intended to serve as alternative nutrient sources that can reduce feed-related carbon intensity while supporting animal health. The platform targets Scope 3 emissions in feed-heavy supply chains and aligns with growing industry demand for measurable decarbonization solutions and sustainability-linked production practices.
Phibro Animal Health Corporation (NASDAQ:PAHC) is a global animal health company that develops and manufactures vaccines, antibiotics, and nutritional products for livestock and companion animals.
2. Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD)
Number of Hedge Fund Holders: 27
Market Capitalization: $605.78 million
Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) is among the best small cap pharma stocks.
TheFly reported on May 7 that IRWD reported its first-quarter 2026 financial performance for the period ended March 31, 2026, showing great year-over-year improvement. Total revenue increased to $106.5 million from $41.1 million, driven primarily by a higher share of U.S. net profits from LINZESS. Total expenses declined significantly to $33.9 million from $70.3 million, reflecting lower R&D, SG&A, and restructuring costs.
The company reported that GAAP net income reached $40.8 million compared with a loss of $37.4 million a year earlier, while non-GAAP net income also turned positive at $40.9 million. Adjusted EBITDA improved sharply to $76.7 million versus a loss of $4.7 million. Cash and cash equivalents rose to $220.5 million, with continued operating cash generation and improved profitability across core segments.
Beyond financials, on May 4, Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) also shared new data from a healthcare provider survey presented at Digestive Disease Week 2026 focused on treatment approaches in short bowel syndrome and the use of total parenteral nutrition. Providers highlighted the clinical goal of reducing reliance on TPN to improve patient quality of life and limit complications such as infections, thrombosis, fatigue, and line-related pain.
Most respondents prioritized lowering the number of days patients require TPN each week, while others focused on reducing daily infusion time, with fewer emphasizing volume reduction. The findings underscored the significant long-term burden of TPN dependence, particularly complications linked to central venous access, which were identified as among the most distressing for patients and key limitations in current treatment approaches for short bowel syndrome.
Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) is a biopharmaceutical company focused on developing and commercializing transformative therapies for gastrointestinal (GI) and rare diseases.
1. Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX)
Number of Hedge Fund Holders: 40
Market Capitalization: $1.62 billion
Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX) is among the best pharmaceutical stocks.
TheFly reported on May 7 that AMLX reported first-quarter 2026 results for the period ended March 31, 2026, alongside pipeline and clinical updates. R&D expenses rose to $27.6 million from $22.1 million a year earlier, driven mainly by increased spending on avexitide development for post-bariatric hypoglycemia and milestone payments tied to the AMX0318 program. SG&A expenses increased slightly to $16.2 million from $15.7 million due to higher professional and consulting costs. Net loss widened to $41.3 million, or $0.37 per share, compared with $35.9 million, or $0.42 per share, in the prior-year period. The company ended the quarter with $279.8 million in cash, cash equivalents, and short-term investments, supporting operations into 2028.
Moreover, earlier on May 5, Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX) announced the initiation of a U.S. Expanded Access Program allowing treatment access to avexitide for up to 250 adults with post-bariatric hypoglycemia. The program provides physicians the ability to request the investigational glucagon-like peptide-1 receptor antagonist for patients with significant unmet medical needs who cannot join ongoing clinical trials and have limited remaining treatment options.
Eligibility includes individuals with PBH following Roux-en-Y gastric bypass surgery, including those who have completed the Phase 3 LUCIDITY trial or previously participated in related studies. The program is designed to expand controlled access to avexitide under defined clinical criteria while broader development continues for the therapy in PBH.
Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX) is a clinical-stage biopharmaceutical company developing therapies for neurodegenerative and endocrine diseases with high unmet medical needs.
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