In this article, we discuss the 10 unknown biotech stocks that can explode in 2022. If you want to read about some more biotech stocks that can explode in 2022, go directly to 5 Unknown Biotech Stocks That Can Explode in 2022.
As coronavirus cases recede across the world and countries open up their borders for international travelers, the biotechnology industry, one of the best-performing sectors during the pandemic panic of 2020, is adapting to a new reality fraught with various challenges related to valuation and access to capital. However, the fundamentals of the sector remain robust and the biotechnology sphere remains a key driver of innovation and growth in the economy. Per market research firm Precedence, the global biotech market will reach $1.7 trillion in value by 2030.
Precedence predicts an annual growth rate of close to 9% for the biotech industry with North America highlighted as the largest market. Other market analysts are also bullish on the sector. According to Brian Abrahams, the co-Head of Biotechnology Research at news platform Endpoint, a recent Endpoint survey reveals that 66% of investors think that biotech will outperform the broader market in 2022. Nearly 58% plan to increase their exposure to the sector this year in anticipation of this growth.
Invest in Cheap Biotech Stocks, Beware of IPOs
Prominent stocks that are expected to lead this boom include Pfizer Inc. (NYSE:PFE), Eli Lilly and Company (NYSE:LLY), and AbbVie Inc. (NYSE:ABBV). However, there are several unknown companies in the biotech industry that offer explosive growth potential at cheaper prices. The statistics from the previous year support the thesis for investing in emerging biotech firms. Per a report by professional services firm EY, there were 50 new molecular entities approved by the FDA in the US in 2020 and 2021, up from 29 per year a decade ago.
In 2022, these numbers are expected to climb even further. However, investors should be careful about IPO activity in the sector. According to data compiled by BioPharma Dive, a combination of soaring inflation and rising interest rates, a recipe for disaster with relation to most growth sectors, has affected the biotechnology market as well, with only nine companies going public by April this year, compared to 33 IPOs that took place in 2021 by April. These IPOs raised around $744 million in proceeds, similar to numbers posted back in 2019. In this tough environment, young drug makers are looking towards other options, like conserving cash and staying private for longer, to stay afloat.
Our Methodology
Relatively unheard of companies that operate in the biotechnology sector and have growth catalysts for the coming months were selected for the list. The business fundamentals and analyst ratings of the companies are also discussed to provide further context for readers. An extensive database of around 900 elite hedge funds tracked by Insider Monkey in the first quarter of 2022 was used to identify the popularity of each stock among hedge funds.
Photo by National Cancer Institute on Unsplash
Unknown Biotech Stocks That Can Explode in 2022
10. Valneva SE (NASDAQ:VALN)
Number of Hedge Fund Holders: 1
Valneva SE (NASDAQ:VALN) is a biotech firm that concentrates on the development of prophylactic vaccines for infectious diseases with unmet needs. On June 20, drug giant Pfizer announced that it would be buying a stake worth $95 million, comprising nearly 8% of Valneva, as part of a larger plan to support the collaboration between the two firms for a vaccine against Lyme Disease. The vaccine, named VLA15, is set to enter a late-stage trial in the third quarter of 2022. Pfizer and Valneva have been working on the vaccine since 2020.
On June 15, Valneva SE (NASDAQ:VALN) had announced that it had entered into a settlement agreement with the government of the United Kingdom, in relation to the termination of the supply agreement for a COVID-19 vaccine candidate being developed by the former.
At the end of the first quarter of 2022, 1 hedge fund in the database of Insider Monkey held stakes worth $850,000 in Valneva SE (NASDAQ:VALN), the same as in the preceding quarter worth $1.3 million.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Laurion Capital Management is the only shareholder in Valneva SE (NASDAQ:VALN) with 25,000 shares worth $850,000.
Just like Pfizer Inc. (NYSE:PFE), Eli Lilly and Company (NYSE:LLY), and AbbVie Inc. (NYSE:ABBV), Valneva SE (NASDAQ:VALN) is one of the stocks that elite investors are monitoring as the market becomes more volatile amid rising inflation.
9. ObsEva SA (NASDAQ:OBSV)
Number of Hedge Fund Holders: 1
ObsEva SA (NASDAQ:OBSV) is a biopharma firm working on the development of novel therapeutics for women suffering from reproductive health and pregnancy. On June 17, the company announced that it had received marketing approval from authorities in Europe for Yselty, a drug made by the firm for the treatment of symptoms related to uterine fibroids in adult women of reproductive age. The decision will allow the firm to sell the drug in all 27 member states of the European Union, in addition to Iceland, Norway, and Liechtenstein.
On June 3, Cantor Fitzgerald analyst Brandon Folkes initiated coverage of ObsEva SA (NASDAQ:OBSV) stock with an Overweight rating and a price target of $6, noting that the firm was building an array of “best-in-class assets” in the women’s health domain.
At the end of the first quarter of 2022, 1 hedge fund in the database of Insider Monkey held stakes worth $33,000 in ObsEva SA (NASDAQ:OBSV), compared to 3 in the previous quarter worth $244,000.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is the only shareholder in ObsEva SA (NASDAQ:OBSV) with 21,531 shares worth $33,000.
8. VYNE Therapeutics Inc. (NASDAQ:VYNE)
Number of Hedge Fund Holders: 4
VYNE Therapeutics Inc. (NASDAQ:VYNE) is a biopharma firm that develops therapeutics for the treatment of immuno-inflammatory conditions. On June 17, the share price of the firm rose by more than 7% after it announced that it had completed enrollment in the phase 2a trial of FMX114, a gel to treat mild-to-moderate atopic dermatitis. The company expects efficacy results from the trial within the next two months. The study will observe the effect of the gel on 25 subjects with at least two lesions on their skin.
On May 12, VYNE Therapeutics Inc. (NASDAQ:VYNE) posted earnings for the first quarter of 2022, reporting earnings per share of $0.10, beating market estimates by $0.25. The revenue over the period was $0.18 million, down 21% year-on-year.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in VYNE Therapeutics Inc. (NASDAQ:VYNE) with 965,098 shares worth more than $627,000.
At the end of the first quarter of 2022, 4 hedge funds in the database of Insider Monkey held stakes worth $1 million in VYNE Therapeutics Inc. (NASDAQ:VYNE), compared to 6 in the preceding quarter worth $3.9 million.
7. NRx Pharmaceuticals, Inc. (NASDAQ:NRXP)
Number of Hedge Fund Holders: 5
NRx Pharmaceuticals, Inc. (NASDAQ:NRXP) is a biotech firm focusing on the development of drugs for the treatment of central nervous system disorders and life-threatening pulmonary diseases. On May 12, the share price of the firm jumped close to 7% after it announced that it had started one of two phase 2 studies on NRX-101, a drug being developed by the company for the treatment of bipolar depression and sub-acute suicidality. The firm will conduct further studies on the drug later this year.
On May 26, NRx Pharmaceuticals, Inc. (NASDAQ:NRXP) had announced that a study on Zyesami, a drug for the treatment of COVID-19, had failed to meet key targets. The firm had filed for breakthrough therapy designation of the drug in April.
At the end of the first quarter of 2022, 5 hedge funds in the database of Insider Monkey held stakes worth $17 million in NRx Pharmaceuticals, Inc. (NASDAQ:NRXP), the same as in the preceding quarter worth $570,000.
6. AC Immune SA (NASDAQ:ACIU)
Number of Hedge Fund Holders: 6
AC Immune SA (NASDAQ:ACIU) is a biotech firm that develops medicines and drugs for the treatment of neurodegenerative diseases associated with protein misfolding. The firm is one of the leading researchers into new treatments for Alzheimer’s, including a monoclonal antibody crenezumab that was designed to target beta-amyloid, a key protein involved in the disease. Drug giant Roche, which has partnered with AC Immune, is also working on another Alzheimer’s candidate, the late-stage data from is expected in late 2022.
AC Immune SA (NASDAQ:ACIU) uses drug development platforms like SupraAntigen and Morphomer. It is working on several therapeutic and diagnostic product candidates, some of which are in clinical trials already.
Among the hedge funds being tracked by Insider Monkey, Australia-based investment firm Platinum Asset Management is a leading shareholder in AC Immune SA (NASDAQ:ACIU) with 1 million shares worth more than $4.2 million.
At the end of the first quarter of 2022, 6 hedge funds in the database of Insider Monkey held stakes worth $38 million in AC Immune SA (NASDAQ:ACIU), compared to 9 in the previous quarter worth $47 million.
In addition to Pfizer Inc. (NYSE:PFE), Eli Lilly and Company (NYSE:LLY), and AbbVie Inc. (NYSE:ABBV), AC Immune SA (NASDAQ:ACIU) is one of the stocks that hedge funds have their eye on in light of shifting valuations in the biotechnology sector.
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Disclosure. None. 10 Unknown Biotech Stocks That Can Explode in 2022 is originally published on Insider Monkey.
