In this article, we will look at the 9 Most Profitable Biotech Stocks to Buy.

On October 6, StemPoint Capital CIO Michelle Ross appeared on CNBC’s ‘Closing Bell’ to talk about the biotech space. She stated that the sector has faced a number of issues in the past few years, including headwinds related to tariffs, MFN drug pricing, a lack of pharma M&A, and a lack of biotech being acquired. Such factors made it appear as if there were a number of reasons not to invest in the sector as opposed to investing in it.

READ ALSO: 14 Best Affordable Stocks to Buy Under $20 and 14 Best Long Term Low Volatility Stocks to Buy Right Now.

However, Ross stated that things have marginally started to change in the last few months. It is more about the confluence of effects coming together instead of one single prominent effect, including some “really great-to-see” M&A happening in companies that are pre-commercial.

That side of the ledger is, therefore, exhibiting a lot of positive movement as well, and Ross expects these trends to continue in a meaningful way.

With these trends in view, let’s look at the most profitable biotech stocks to buy.

Our Methodology

We used stock screeners to make a list of profitable biotech stocks (with a TTM net income over $500 million) and selected the top 9 with the highest number of hedge fund holders as of Q2 2025. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund holders.

Note: All data was recorded on October 24.

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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).

9 Most Profitable Biotech Stocks to Buy

9. Genmab A/S (NASDAQ:GMAB)

​TTM Net Income: $1.37 billion

Number of Hedge Fund Holders: 19

Genmab A/S (NASDAQ:GMAB) is one of the most profitable biotech stocks to buy. H.C. Wainwright analyst Ram Selvaraju maintained a Buy rating on Genmab A/S (NASDAQ:GMAB) on October 21 with a $40 price target.

The analyst cited the promising clinical developments in the company’s portfolio, stating that the recent presentation at the ESMO meeting showed the efficacy of  rinatabart sesutecan (Rina-S)  for the treatment of endometrial cancer. It demonstrated notable response rates in patients, irrespective of OFRα expression levels.

According to the analyst, these results are especially encouraging when compared to present treatments that show lower overall response rates, including the combination of ELAHERE and Keytruda.

Genmab A/S (NASDAQ:GMAB) is an international biotechnology company that develops human antibody therapeutics for the treatment of cancer and other diseases. Its product pipeline includes DARZALEX to treat certain indications of multiple myeloma, TEPEZZA for the treatment of thyroid eye disease, and Arzerra to treat certain indications of chronic lymphocytic leukemia.

8. Royalty Pharma Plc (NASDAQ:RPRX)

TTM Net Income: $1.02 billion

Number of Hedge Fund Holders: 30

Royalty Pharma Plc (NASDAQ:RPRX) is one of the most profitable biotech stocks to buy. On October 10, Morgan Stanley analyst Terence Flynn slashed the price target on Royalty Pharma Plc (NASDAQ:RPRX) to $54 from $55 while keeping an overweight rating on the shares.

The rating update came ahead of Q3 earnings, with the firm telling investors in a preview for the biopharma group that it adjusted models for IQVIA trends along with intra-quarter updates.

The same day, Citi analyst Geoff Meacham also maintained a Buy rating on Royalty Pharma Plc (NASDAQ:RPRX) and set a $43 price target.

Goldman Sachs analyst Asad Haider is another analyst bullish on the stock, as he assigned Royalty Pharma Plc (NASDAQ:RPRX) a Buy rating on October 2.

Haider supported the optimistic rating with the company’s growth potential and strategic positioning, stating that Royalty Pharma Plc (NASDAQ:RPRX) offers investors a unique opportunity to attain exposure to a diversified portfolio of biopharma royalty streams. This helps mitigate the typical risks and volatility linked to biotech investments.

He also said that Royalty Pharma Plc (NASDAQ:RPRX) is experiencing the start of a notable expansion phase anticipated to capitalize on the rising market for royalty funding. The analyst added that the innovation trends in China are further driving growth prospects.

Royalty Pharma Plc (NASDAQ:RPRX) is a funder of innovation in the biopharmaceutical industry and a buyer of biopharmaceutical royalties. It collaborates with innovators from research hospitals, non-profits, and academic institutions through small and mid-cap biotech companies to global pharma companies. The company funds innovation in the industry both directly, by partnering with companies to co-fund late-stage clinical trials and new product launches in exchange for future royalties, and indirectly, by acquiring existing royalties from the original innovators. Royalty Pharma Plc’s (NASDAQ:RPRX) portfolio includes royalties in over 35 commercial products, including Johnson & Johnson’s Tremfya, AbbVie and Johnson & Johnson’s Imbruvica, Novartis’ Promacta, Pfizer’s Xtandi, Pfizer’s Nurtec ODT, and others.