1. Roivant Sciences Ltd. (NASDAQ:ROIV)
Number of Hedge Fund Holders: 62
Market Capitalization as of October 10, 2024: $8.51 Billion
Roivant Sciences Ltd. (NASDAQ:ROIV) ranks first on our list of the most promising mid-cap stocks according to hedge funds. The commercial biotechnology company is engaged in drug development using technology. Some of its subsidiaries include Immunovant, Dermavant Sciences, Priovant Therapeutics, and Lokavant Inc., to name a few.
The past quarter has been quite a feat for the company. In the fiscal first quarter of 2024, Roivant Sciences (NASDAQ:ROIV) announced the completion of enrollment in a trial for its drug, batoclimb. Moreover, in June, the company completed the end of its phase 2 meeting with the FDA and shared plans to commence phase 3 trials for its popular drug, brepocitnib. VTAMA, its novel drug approved for the treatment of psoriasis, brought in revenue worth $18.4 million during FQ1 2024.
Since 2019, the company has executed 10 positive phase 3 trials. By March 2025, Immunovant, its subsidiary, is set to have registered 4-5 indications and/or programs and 10 by March 2026. To align with this goal, the subsidiary is expected to have registered at least 3 programs by the end of 2024.
Overall, Roivant Sciences Ltd. (NASDAQ:ROIV) spent $133.2 million on research and development during the quarter, up by $8.1 million from FQ1 2023. The company’s expansion strategy lies in establishing nimble subsidiaries to commercialize its drugs and technologies. One can say its strategy is working out fine, explaining why 62 hedge funds were bullish on the stock. In addition to that, analysts’ price target of $17 points to an upside of 48% from current levels, as of October 10, 2024.
Tourlite Capital Management made the following regarding Roivant Sciences Ltd. (NASDAQ:ROIV) in its fourth quarter 2023 investor letter:
“During the fourth quarter, the fund initiated a significant position in Roivant Sciences Ltd. (NASDAQ:ROIV), a biotech company specializing in consolidating promising drug patents, known as ‘vants’. Our thesis is based on the following framework:
Cash value: ROIV’s strategic acquisition of Televant (85% ownership) from Pfizer for $45 million in December 2022, followed by the sale of this asset to Roche for $5.2 billion in Q4 2024, showcases management’s ability for value creation Adjusting for the sale proceeds, Roivant has a net cash position of ~$8 per share…” (Click here to read the full text)
Overall, ROIV ranks first among the 10 most promising mid-cap stocks according to hedge funds. While we acknowledge the potential of biotechnology companies, our conviction lies in the belief that 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 ROIV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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