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

2. Kura Oncology, Inc. (NASDAQ:KURA)

Number of Hedge Fund Holdings: 36 

Kura Oncology, Inc. (NASDAQ:KURA) is a clinical-stage biopharmaceutical company focused on developing precision medicines for the treatment of cancer. At its core, the company designs and develops targeted therapies that aim to improve outcomes for patients with various types of solid tumors and blood cancers.

A major catalyst for Kura Oncology, Inc. (NASDAQ:KURA) is the development of ziftomenib, its lead drug candidate. Ziftomenib, an oral medication targeting the menin-MLL1 protein-protein interaction, has received a Breakthrough Therapy Designation for patients with relapsed/refractory NPM1-mutant acute myeloid leukemia (AML). This designation could accelerate the drug’s path to market, potentially leading to increased revenue and market share. Another catalyst is the company’s expanding clinical trial program. The corporation has completed enrollment in a Phase 2 registration-directed trial of ziftomenib (KOMET-001) and is conducting multiple clinical trials to evaluate ziftomenib in combination with current standard-of-care regimens.

Kura Oncology, Inc. (NASDAQ:KURA) reported significant financial developments in Q3 2024, with research and development expenses increasing to $41.7 million from $29.3 million in Q3 2023 which was driven by higher clinical trial costs for key programs such as ziftomenib and KO-2806. General and administrative expenses also rose to $18.2 million from $13.1 million, contributing to a net loss of $54.4 million, up from $38.6 million in the prior year. The company maintains a strong cash position of $455.3 million, ensuring operational funding into 2027.

As of the third quarter of 2024, 36 hedge funds had investments in the company, with Suvretta Capital Management being the largest shareholder, holding stakes valued at $149.5 million, according to the Insider Monkey database. Analysts on Wall Street have a consensus Strong Buy rating for the stock. Over the past three months, analysts have set a 12-month price target of $30.89, with estimates ranging from a low of $22.00 to a high of $37.00. This represents a potential upside of 52.47% from the current price of $20.26.