In this article, we will look at 10 Hot Biotech Stocks Under $5.
The biotechnology sector is gaining new momentum with better market conditions, cutting-edge innovations, and growing investor attention. After a tough 2024, the industry is ready for major growth powered by developments in personalized medicine, AI-driven drug discovery, and rising demand for biologics. MarketsandMarkets reported that the global biotech market should grow from $483.0 billion in 2024 to $546.0 billion in 2025, reflecting a solid 13% increase. This growth shows the sector’s resilience and future potential.
A major factor in this upturn is the expected change in the Federal Reserve’s interest rate policies. Biotech needs lots of capital for expensive R&D and clinical tests, making it sensitive to shifting rate trends. Genetic Engineering and Biotechnology News noted that lower rates increase capital availability, helping biotech companies extend operations, attract venture funds, and speed up drug development. Analysts think a rate cut could free up billions in sidelined investment money for struggling new biotech companies seeking stable funding.
Biotech stocks are gaining traction among investors. Despite short-term ups and downs, biotech remains a high-growth area with good opportunities for risk-takers. Top investment banks have noticed biotech’s recovery. Goldman Sachs called it an “undervalued opportunity,” pointing to strong fundamentals, better clinical results, and a favorable regulatory setting. Goldman Sachs stressed that biotech stocks offer an “option-like structure” with strong upside potential, especially as interest rates fall. Simultaneously, JPMorgan analysts expect biotech funding to recover, noting signs of stability in research and manufacturing areas that suffered in previous funding droughts. Though biotech IPOs have been quiet since 2021, industry experts believe that falling interest rates and favorable conditions for investments could reopen the IPO window for companies seeking institutional backing.
Meanwhile, scientific breakthroughs are also driving biotech growth as gene editing, AI-powered drug discovery, and precision medicine are changing how we treat cancer, autoimmune disorders, and rare genetic conditions. With advances in CRISPR gene editing and cell therapies, biotech companies are addressing medical needs in ways unimaginable just ten years ago.
With that in mind, let’s explore the 10 Hot Biotech Stocks Under $5, offering both price appreciation potential and reliable shareholder returns.
A close-up of a biotechnology machine working on an oncology therapy.
Our Methodology
To identify the 10 Hot Biotech Stocks Under $5, we screened for companies in the biotechnology sector trading below $5 per share while meeting key financial and growth criteria. We focused on stocks with a strong market capitalization, ensuring they had a solid financial foundation. Additionally, we selected companies that have gained at least 20% in the past six months, reflecting recent positive momentum, and exhibit a potential upside of at least 20%, indicating strong future growth prospects. After filtering stocks based on these parameters, we ranked them in ascending order of their potential upside to determine our final list.
To further validate our selections, we analyzed hedge fund sentiment using data from Insider Monkey’s Q4 2024 hedge fund database. Stocks with higher hedge fund ownership are often backed by institutional investors with deep research capabilities, adding an additional layer of confidence to their growth potential.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Xeris Biopharma Holdings, Inc. (NASDAQ:XERS)
Potential Upside: 29.97%
Number of Hedge Fund Holders: 21
Xeris Biopharma Holdings, Inc. (NASDAQ:XERS) is gaining attention as a biotech stock supported by robust commercial results and pipeline advancements. The company posted a total revenue of $203.1 million for the year ended December 31, 2024, an increase of 24% from the previous year, while product sales climbed 28%. For 2025, Xeris projects revenue between $255 million and $275 million, suggesting over 30% growth at the midpoint.
A crucial factor in Xeris Biopharma Holdings, Inc. (NASDAQ:XERS)’s growth was Recorlev’s success, which generated $64 million in revenue in 2024, a 118% year-over-year increase. The company boosted investments in sales and patient support, resulting in peak patient starts in the second half of 2024. Gvoke, Xeris’s ready-to-use glucagon therapy, saw revenue rise 24% to nearly $83 million, driven by increasing prescriptions and prescriber growth. Although Keveyis experienced reduced annual revenue, it maintained stability by ending the year with roughly the same patient count with which it began.
Furthermore, Xeris Biopharma Holdings, Inc. (NASDAQ:XERS) is also progressing with XP-8121, a once-weekly subcutaneous levothyroxine injection currently in phase 3 trials for hypothyroidism. If authorized, this treatment could fill an important gap for patients who struggle with oral thyroid medications because of gastrointestinal conditions. The company’s XeriSol and XeriJect formulation technologies continue to attract potential partners, enhancing Xeris’s potential.
In a recent development, Xeris Biopharma Holdings, Inc. (NASDAQ:XERS) collaborated with the American Diabetes Association to boost the importance of glucagon prescriptions for patients facing a high risk of severe hypoglycemia. This collaboration aims to enhance access to critical treatments, simultaneously strengthening the company’s position in diabetes care.
Moreover, the market has responded positively, as the company’s stock price increased by 110% over the past six months. Xeris Biopharma Holdings, Inc. (NASDAQ:XERS) is emerging as a hot biotech stock with impressive revenue growth, a promising late-stage pipeline, and ongoing improvements in patient care.
9. Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX)
Potential Upside: 105.96%
Number of Hedge Fund Holders: 30
Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX) is continuously growing its business focused on treatments for neurodegenerative and metabolic conditions. It intends to deliver groundbreaking therapies, with its major candidates focusing on diseases that lack adequate treatment options. With several ongoing clinical studies, the company is positioning itself for major growth soon.
On the financial front, Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX) concluded 2024 with $176.5 million in cash, in addition to an additional $65.5 million raised in January 2025. Research and development costs fell to $104.1 million from $128.2 million in 2023 due to lower spending on AMX0035, the company’s ALS treatment. Meanwhile, selling, general, and administrative (SG&A) expenses also decreased to $114.3 million from $188.4 million due to reduced payroll and professional services. The company posted a $301.7 million net loss for 2024, or $4.43 per share. Nevertheless, Amylyx remains confident that its current funds will support operations through 2026 despite these losses.
Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX) recently initiated its Phase 3 LUCIDITY trial, with the first participant expected to receive a dose in Q1 2025 and preliminary results expected in 2026. Moreover, Avexitide has FDA Breakthrough Therapy and Orphan Drug status, indicating its promise as the first approved PBH treatment.
The company is also advancing AMX0035 for Wolfram syndrome and progressive supranuclear palsy, with results expected in 2025. Amylyx Pharmaceuticals, Inc.’s (NASDAQ:AMLX) AMX0114 program for ALS is also advancing, with early Phase I data expected to come later this year. With solid financial backing and a promising pipeline of projects, it stands as a hot biotech stock to buy.
8. Kodiak Sciences Inc. (NASDAQ:KOD)
Potential Upside: 127.27%
Number of Hedge Fund Holders: 13
Kodiak Sciences Inc. (NASDAQ:KOD) is advancing in the biotech field by developing long-lasting treatments for retinal diseases. The company’s main candidate, tarcocimab tedromer, uses its Antibody Biopolymer Conjugate (ABC) platform to boost durability and effectiveness against wet age-related macular degeneration (AMD) and diabetic retinopathy. Moreover, Kodiak aims to reduce the frequency of injections, providing patients with a more practical treatment option.
On the financial front, Kodiak Sciences Inc. (NASDAQ:KOD) posted a $43.9 million net loss in Q3 2024, lower than the $50.0 million loss from the previous year. Meanwhile, research and development costs dropped to $31.9 million due to lower manufacturing and trial expenses, though the company continued investing in late-stage programs. G&A expenses also decreased to $14.8 million as part of cost-cutting efforts. Kodiak holds a strong position with $197.9 million in cash, which should fund operations through 2026 and support the company’s clinical work.
Notably, Kodiak Sciences Inc. (NASDAQ:KOD) has just completed enrollment for its GLOW2 Phase 3 trial testing tarcocimab for diabetic retinopathy. With over 250 patients, this study builds on the successful GLOW1 trial and adds an extra loading dose to increase dosing flexibility. If results match previous findings, GLOW2 and the ongoing DAYBREAK Phase 3 trial for wet AMD will support a single Biologics License Application (BLA) covering multiple uses. The company expects GLOW2 results in Q1 2026 and DAYBREAK data in Q2 2026, strengthening its regulatory position.
With several late-stage trials moving toward potential approval, it remains a hot biotech stock, especially for those interested in innovative eye treatments.
7. Heron Therapeutics, Inc. (NASDAQ:HRTX)
Potential Upside: 152.00%
Number of Hedge Fund Holders: 17
Heron Therapeutics, Inc. (NASDAQ:HRTX) has advanced its commercial-stage biotech portfolio, concentrating on novel drug delivery systems that improve patient care. Its Biochronomer technology allows extended drug release, making its treatments highly effective for managing chemotherapy nausea, post-surgery pain, and other conditions. With a robust pipeline and growing product use, Heron is cementing its position in the biotech industry.
Financially, Heron Therapeutics, Inc. (NASDAQ:HRTX) posted a total net revenue of $144.2 million for the year ended December 31, 2024, up 14% from the prior year. The company reached profitability in Q4 with $3.6 million in net income, a significant improvement from a $10.7 million loss in Q4 2023. Yearly adjusted EBITDA hit $8.6 million, reflecting improved operational efficiency and cost management. CINVANTI, its main injectable antiemetic, bounced back strongly with over $100 million in 2024 sales. Meanwhile, ZYNRELEF, the company’s post-op pain therapy, reached record revenues of $8.5 million in Q4, increasing 33% from the previous quarter. The company finished the year with $59.3 million in cash, giving it stable funding for growth.
Heron Therapeutics, Inc. (NASDAQ:HRTX) scored a major legal win on December 3, 2024, when the U.S. District Court ruled in the company’s favor in a patent dispute with Fresenius Kabi USA, LLC. The court upheld Heron’s CINVANTI patents, which remain protected until 2035. This prevents immediate generic competition, strengthening Heron’s market position and revenue stability.
Moreover, the company has significant momentum in its acute care products, with APONVIE and ZYNRELEF showing substantial yearly growth. ZYNRELEF now has broader coverage under the NOPAIN Act and enhanced ease of use with its new vial access needle (VAN), which should speed up adoption in 2025.
Heron Therapeutics, Inc. (NASDAQ:HRTX) is set for continued growth. Strong finances, increasing product adoption, and secure patent protection make it a hot biotech stock.
6. Cardiff Oncology, Inc. (NASDAQ:CRDF)
Potential Upside: 204.96%
Number of Hedge Fund Holders: 13
Cardiff Oncology, Inc. (NASDAQ:CRDF) is a clinical-stage biotechnology company that develops precision medicines for hard-to-treat cancers. Its main drug, onvansertib, is an oral Polo-like Kinase 1 (PLK1) inhibitor targeting KRAS-mutated colorectal cancer (mCRC) and other tumors. The company has shown promising clinical results and has a solid regulatory plan.
As of December 31, 2024, Cardiff Oncology, Inc. (NASDAQ:CRDF) reported $91.7 million in cash and short-term investments, boosted by a recent $40 million raise. These funds extend its financial runway into the first quarter of 2027, ensuring support for ongoing trials. Cardiff also secured a new patent for onvansertib with bevacizumab in KRAS-mutated colorectal cancer, ensuring patent protection until at least 2043.
Cardiff Oncology, Inc. (NASDAQ:CRDF) is progressing with the CRDF-004 Phase 2 trial in first-line RAS-mutated mCRC. Data from December 2024 revealed a 64% objective response rate (ORR) with 30 mg onvansertib compared to just 33% in the control group. The deepest tumor shrinkage occurred in patients receiving the drug, establishing onvansertib’s efficacy. Screening has stopped, with a full enrollment of 90 patients expected soon.
Cardiff Oncology, Inc. (NASDAQ:CRDF) plans to meet with the FDA about its pivotal trial and optimal dosing. The company’s approach mirrors Pfizer’s BREAKWATER trial, which received accelerated approval for encorafenib in first-line mCRC. Recent lab data also suggest onvansertib might work for hormone-receptor-positive breast cancer.
With a clear path forward and impressive clinical momentum, Cardiff Oncology, Inc. (NASDAQ:CRDF) looks like a hot biotech stock for those seeking breakthrough cancer treatments.
5. Eledon Pharmaceuticals, Inc. (NASDAQ:ELDN)
Potential Upside: 285.00%
Number of Hedge Fund Holders: 26
Eledon Pharmaceuticals, Inc. (NASDAQ:ELDN) is a clinical-stage biotechnology company. It develops immunology treatments to improve organ transplant outcomes and treat autoimmune conditions. Its main drug, tegoprubart, aims to prevent rejection in kidney, liver, and pancreatic islet cell transplants.
For Q3 ended September 30, 2024, Eledon Pharmaceuticals, Inc. (NASDAQ:ELDN) reported a balance of $78.2 million in cash, not including its recent $135 million financing. Research and development costs rose to $16.5 million due to an increase in clinical trials, including the Phase 1b and Phase 2 BESTOW studies. General and administrative costs grew to $4 million from higher service and operational costs, though the company’s recent $135 million financing round should fund operations through 2026.
Eledon Pharmaceuticals, Inc. (NASDAQ:ELDN) hit key milestones recently as it completed enrollment for its Phase 2 BESTOW trial of tegoprubart for kidney transplants four months early. This trial will assess tegoprubart’s ability to prevent organ rejection, with results expected in late 2025. Updated Phase 1b data presented at the American Transplant Congress (ATC) showed improved kidney function in patients after transplant.
Moreover, Eledon Pharmaceuticals, Inc. (NASDAQ:ELDN) reported positive results in an investigator-initiated trial at UChicago Medicine. The trial revealed that tegoprubart helped type 1 diabetes patients achieve insulin independence after islet transplantation. This could make tegoprubart therapy a safer alternative to current treatments with harsh side effects.
Eledon Pharmaceuticals, Inc. (NASDAQ:ELDN) also contributed to a breakthrough at Massachusetts General Hospital in a groundbreaking xenotransplantation. Tegoprubart showed promising results when used in a genetically modified pig kidney transplant, showcasing its value for xenotransplantation. With the rising need for new organ transplant options, Eledon might emerge as a frontrunner in cutting-edge immunosuppressive treatments. This could not only create new revenue streams but also broaden the company’s market footprint.
With Eledon Pharmaceuticals, Inc.’s (NASDAQ:ELDN) strong finances and advancing clinical programs, it remains a hot biotech stock for those interested in innovative immunosuppression therapies.
4. Precigen, Inc. (NASDAQ:PGEN)
Potential Upside: 311.77%
Number of Hedge Fund Holders: 10.
Precigen, Inc. (NASDAQ:PGEN) develops gene and cell therapies for cancer, autoimmune disorders, and infectious diseases. The clinical-stage biopharma company uses its UltraCAR-T and AdenoVerse platforms to create innovative treatments, with a special emphasis on immuno-oncology.
Precigen, Inc. (NASDAQ:PGEN) ended Q3 2024 with a robust financial standing bolstered by a $30.9 million public offering in August. Research and development expenses rose $5.7 million (16%) in the first nine months of 2024 versus 2023. This was mainly due to investments in PRGN-2012, the company’s leading gene therapy candidate. SG&A costs held steady at $44.8 million, showing effective cost management. Precigen’s cash reserves, enhanced by the capital raise, fund ongoing clinical work and commercialization efforts. Furthermore, revenue dropped 45% year-over-year due to a decline in the Exemplar segment’s performance, but Precigen remains committed to advancing its high-value therapeutic programs.
A major milestone for Precigen, Inc. (NASDAQ:PGEN) is the FDA’s acceptance of its Biologics License Application (BLA) for PRGN-2012, a gene therapy targeting recurrent respiratory papillomatosis (RRP). The FDA granted priority review with an action date set for August 27, 2025. If approved, PRGN-2012 would be the first FDA-approved RRP treatment, offering an alternative to repeated surgeries. The company is gearing up for a potential market launch, including manufacturing and marketing preparations.
Precigen, Inc. (NASDAQ:PGEN) shares have jumped 73.50% over six months, indicating strong investor confidence. The company is also advancing PRGN-3006 for acute myeloid leukemia and PRGN-3008, a next-generation CD19-targeting therapy for cancer and autoimmune conditions. With a potential FDA approval on the horizon and promising pipeline progress, Precigen stands out as a hot biotech stock worth watching.
3. Compass Therapeutics, Inc. (NASDAQ:CMPX)
Potential Upside: 397.20%
Number of Hedge Fund Holders: 14
Compass Therapeutics, Inc. (NASDAQ:CMPX) produces antibody-based therapies for various cancers. This company’s main candidates include tovecimig (CTX-009), a bispecific antibody targeting DLL4 and VEGF-A; CTX-471, a CD137 agonist; and CTX-10726, a PD-1 x VEGF-A bispecific antibody.
Financially, Compass Therapeutics, Inc. (NASDAQ:CMPX) ended 2024 with $127 million in cash, securing operations into 2027. General and administrative (G&A) expenses grew to $15.1 million from $12.2 million, while research and development (R&D) expenses rose to $42.3 million from $38.1 million. Despite spending $45 million on operations, Compass maintained financial stability by raising $18 million through its ATM program.
On the clinical side, Compass Therapeutics, Inc. (NASDAQ:CMPX) is advancing several promising programs. The Phase 2/3 COMPANION-002 trial for tovecimig in advanced biliary tract cancer is fully enrolled, with results expected by the end of Q1 2025. An investigator-sponsored study (IST) at MD Anderson will soon begin administering tovecimig in first-line BTC. Additionally, the company plans to start a Phase 2 trial for DLL4-positive colorectal cancer in mid-2025.
Beyond tovecimig, Compass is developing CTX-10726, a PD-1 x VEGF-A bispecific antibody, with an IND filing planned for late 2025. The company is also advancing CTX-471 into Phase 2 trials for NCAM/CD56-expressing tumors. Compass Therapeutics, Inc. (NASDAQ:CMPX) is also progressing CTX-8371, a PD-1 x PD-L1 bispecific checkpoint inhibitor, with early trial data expected in late 2025.
With solid finances and upcoming clinical milestones, Compass Therapeutics, Inc. (NASDAQ:CMPX) remains a hot biotech stock to watch.
2. aTyr Pharma, Inc. (NASDAQ:ATYR)
Potential Upside: 414.52%
Number of Hedge Fund Holders: 25
aTyr Pharma, Inc. (NASDAQ:ATYR) is advancing innovative immunological therapies at the clinical stage. The company’s primary candidate, efzofitimod, targets pulmonary sarcoidosis, a serious interstitial lung disease (ILD) with few treatment options. aTyr is also developing this drug for systemic sclerosis-related ILD, building a stronger long-term pipeline.
aTyr Pharma, Inc. (NASDAQ:ATYR) ended 2024 with $75.1 million in cash and restricted cash, cash equivalents, and investments. It boosted its finances with an $18.8 million ATM offering in early 2025, extending the company’s cash runway at least a year beyond the expected Phase 3 EFZO-FIT trial results. R&D costs reached $54.4 million in 2024, mainly supporting the Phase 3 trial and manufacturing, while administrative expenses were $13.8 million. The company’s partnership with Kyorin Pharmaceutical has already yielded over $20 million in milestone payments. It has the potential for up to $155 million more based on regulatory and commercial success.
Clinically, aTyr Pharma, Inc. (NASDAQ:ATYR) is making significant progress with efzofitimod. It has completed enrollment for its pivotal EFZO-FIT Phase 3 study, testing efzofitimod’s ability to reduce or eliminate corticosteroid use in pulmonary sarcoidosis patients. This study includes 268 patients globally, with results expected in Q3 2025. An independent data and safety monitoring board (DSMB) completed its fourth review in March 2025 and recommended continuing without changes, supporting the drug’s safety profile.
Furthermore, aTyr Pharma, Inc. (NASDAQ:ATYR) is testing efzofitimod for systemic sclerosis-related ILD in its Phase 2 EFZO-CONNECT trial. Interim data from the study on skin benefits is expected to be released in Q2 2025.
aTyr Pharma, Inc. (NASDAQ:ATYR) shares have jumped 107.42% over the past six months. With solid finances, upcoming clinical milestones, and increasing industry recognition, aTyr Pharma remains a hot biotech stock for 2025.
1. Gossamer Bio, Inc. (NASDAQ:GOSS)
Potential Upside: 604.98%
Number of Hedge Fund Holders: 35
Gossamer Bio, Inc. (NASDAQ:GOSS) is a clinical-stage biopharmaceutical company working on the development of new treatments. The treatments aim to tackle pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD). The company’s key candidate, seralutinib, is inhaled and targets pathways involved in abnormal cellular growth problems, inflammation, and fibrosis.
Financially, Gossamer Bio, Inc. (NASDAQ:GOSS) ended 2024 with $294.5 million in cash and marketable securities, which gives the company a cash runway into the first half of 2027. R&D expenses rose slightly to $138.5 million for the year, up from $135.3 million in 2023, due to Gossamer’s advancements in late-stage clinical trials. General and administrative expenses dropped to $36.1 million from $38.5 million, emphasizing efficient cost control. Moreover, Gossamer dramatically reduced its net loss to $56.5 million in 2024 from $179.8 million in 2023. These numbers highlight improved financial management and efficiency in operations.
Clinically, Gossamer Bio, Inc. (NASDAQ:GOSS) is advancing seralutinib for both PAH and PH-ILD. The Phase 3 PROSERA trial for PAH is currently enrolling patients, with topline results expected by late 2025. The company will start another Phase 3 trial for PH-ILD in the second half of 2025, which could expand seralutinib’s market reach. Gossamer had a regulatory breakthrough when Japan’s Ministry of Health, Labor and Welfare granted seralutinib Orphan Drug status, boosting its global strategy.
With a strong financial position, multiple advanced trials underway, and upcoming regulatory breakthroughs, Gossamer Bio, Inc. (NASDAQ:GOSS) is emerging as a hot biotech stock for investors to monitor in 2025.
Overall, Gossamer Bio, Inc. (NASDAQ:GOSS) ranks first on our list of the Hot Biotech Stocks Under $5. While we acknowledge the potential of GOSS, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GOSS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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