9 Oversold Biotech Stocks to Invest In

In this article, we will take a look at 9 Oversold Biotech Stocks to Invest In.

Biotech companies are making a solid comeback following an extended slump as investors shift their focus back to value and healthcare. Lower interest rates, increased M&A activity, and decreasing policy uncertainties have brought back confidence in the once-depleted sector. As an example, the iShares Biotechnology ETF has gained around 26% year-to-date.

According to Oppenheimer’s Q3 report on M&A activity, biopharma market sentiment improved throughout the quarter, with acquisition activity expected to increase through the end of 2025. The quarter witnessed $38 billion spent on M&A transactions, with $20 billion of those transactions occurring in September alone. Moreover, owing largely to early-stage assets in the cardiovascular-metabolic, immunology, and oncology fields, clinical-stage acquisitions enjoyed their best quarter since late 2023.

Additionally, the FDA greenlit 45 new medication applications during the third quarter, a significant uptick compared to earlier periods. Accelerated approvals, primarily in the fields of gene and cell therapy, as well as cutting-edge biologics aimed at cancer and rare diseases, were the main drivers of this surge.

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Our Methodology

To come up with our list of the Most Oversold Biotech Stocks to Invest In we used stock screeners to extract a list of biotechnology companies with a Relative Strength Index (RSI) under 40. Next, we settled on stocks with an upside potential of more than 20% and that were popular among elite hedge funds in second quarter of 2025.

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. Atai Beckley NV (NASDAQ:ATAI)

Analyst Upside: 234.47%

RSI Value: 31.39

Number of Hedge Fund Holders: 17

Atai Beckley NV (NASDAQ:ATAI) ranks among the most oversold biotech stocks to invest in. H.C. Wainwright reaffirmed its Buy rating and $15 price target for Atai Beckley NV (NASDAQ:ATAI) on November 14 following the company’s third-quarter report. The firm highlighted a number of significant events from the report, including the company’s BPL-003 receiving Breakthrough Therapy Designation (BTD) in treatment-resistant depression and the conclusion of the merger between Atai Life Sciences and Beckley Psytech.

Atai Beckley NV (NASDAQ:ATAI) reported solid findings from the open-label extension study in its Phase 2b clinical trial for BPL-003. The study found that administering a 12 mg dose of BPL-003 eight weeks after the original dose resulted in accelerated antidepressant effects that lasted up to eight weeks.

In addition, the report covered Atai Beckley NV (NASDAQ:ATAI) shareholders approving the acquisition of Beckley Psytech Limited and the company’s anticipated redomiciliation in Delaware. In that context, the company also filed a proposal for the resale of up to 5.3 million shares in connection with its acquisition of Beckley Psytech.

Atai Beckley NV (NASDAQ:ATAI), headquartered in the Netherlands, is a clinical-stage biopharmaceutical company developing innovative treatments for mental health disorders, including depression, anxiety, and substance use disorders.