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

3. Arvinas, Inc. (NASDAQ:ARVN) 

Number of Hedge Fund Holdings: 34 

Arvinas, Inc. (NASDAQ:ARVN) is a clinical-stage biopharmaceutical company that specializes in developing innovative protein degradation therapeutics. At its core, the company focuses on creating drugs that harness the body’s natural protein disposal system to selectively remove disease-causing proteins.

A major catalyst for Arvinas, Inc. (NASDAQ:ARVN) is its robust clinical pipeline, particularly its lead candidate vepdegestrant (ARV-471). This PROTAC protein degrader is being investigated for treating ER+/HER2- breast cancer. Clinical trials have yielded encouraging results, with a Phase 1b trial demonstrating a clinical benefit rate of 63% and an overall response rate of 41.9% among heavily pretreated patients. These outcomes have prompted the initiation of several Phase 3 trials, including VERITAC-2 and VERITAC-3, which could pave the way for regulatory approval if successful.

The company has shown impressive growth since its market debut in 2016, when it raised about $120 million through the issuance of approximately 7.5 million shares at $16 per share. The stock has experienced significant volatility, with notable gains in recent years. For instance, shares surged from around $22 in November 2023 to approximately $29, marking an impressive gain of nearly 35%.

Arvinas, Inc. (NASDAQ: ARVN) has emerged as one of the best biotech stocks, gaining notable hedge fund interest. The company reported impressive Q3 2024 financial results, with revenue surging to $102.4 million from $34.6 million in Q3 2023 which was driven primarily by $76.7 million from the Novartis license agreement, which offset declines in collaborations with Pfizer and Bayer. The corporation maintains a strong cash position of $1.1 billion, ensuring an operational runway into 2027. R&D expenses rose slightly to $86.9 million from $85.9 million, while G&A expenses increased significantly to $75.8 million from $22.6 million, reflecting strategic investments.

As of Q3 2024, 34 hedge funds held stakes in Arvinas, Inc. (NASDAQ: ARVN), with EcoR1 Capital being the largest shareholder, holding $165.7 million in the company, according to the Insider Monkey database. Analysts have a consensus Strong Buy rating on the company, with an average price target of $61.14, ranging from a low of $48.00 to a high of $87.00. This represents a potential upside of 144.85% from the current price of $24.97.