10 Best Small-Cap Biotech Stocks with Massive Potential According to Hedge Funds

7. 89bio, Inc. (NASDAQ:ETNB)

Number of Hedge Fund Holdings: 30

89bio, Inc. (NASDAQ:ETNB) is a clinical-stage biopharmaceutical company focused on developing innovative therapies for liver and cardio-metabolic diseases. The company stands out with its focus on FGF21 analogs, especially BIO89-100, which has shown strong potential in clinical trials for NASH, demonstrating safety and significant reductions in liver fat and lipid markers. With a dual focus on NASH and SHTG, the company targets two large markets with one lead candidate. Its innovative use of glycoPEGylation technology enhances BIO89-100’s efficacy and durability, positioning the company competitively in the biotech field.

As of September 30, 2024, 89bio, Inc. (NASDAQ:ETNB) reported $423.8 million in cash, cash equivalents, and marketable securities, ensuring robust funding for its clinical trials and operations. In Q3 2024, R&D expenses rose to $141.4 million (from $31.4 million in Q3 2023) due to an $81 million milestone payment to BiBo Biopharma, increased clinical and manufacturing costs, and higher personnel expenses. G&A expenses also increased to $10.5 million from $7.9 million. The net loss for Q3 2024 widened to $149.1 million, reflecting the company’s investments in clinical progress, including pivotal Phase 3 trials for its lead candidate, pegozafermin, targeting MASH and SHTG. These trials aim to address significant unmet medical needs, with potential for accelerated approvals in the U.S. and Europe. Additionally, an amended credit facility with K2 HealthVentures provides access to up to $150 million, supporting 89bio, Inc. (NASDAQ:ETNB)’s growth.

As of Q3 2024, 30 hedge funds tracked by Insider Monkey held stakes in the stock, with RA Capital Management being the largest shareholder, holding $104.8 million in shares. Analysts have a Moderate Buy rating on the stock, with an average 12-month price target of $27.00, ranging from $12.00 to $34.00. This suggests a potential upside of 224.91% from the stock’s current price of $8.31. ETNB ranks fifth on our list of the best biotech stocks.