In this article, we will take a detailed look at the 10 Worst Cancer Stocks To Buy Now According to Short Sellers.
Cancer is the second leading cause of death globally, just behind cardiovascular disease, making oncology one of the largest sectors in the life sciences. As of 2024, 11 of the top 15 diseases globally by the number of active drugs were cancer-related. Breast cancer led the pack with approximately 1,031 active drugs in development. According to WHO, by 2050, over 35 million new cancer cases are projected, marking a 77% increase from the estimated 20 million cases in 2022. This sharp rise in the global cancer burden is driven by an aging and expanding population, along with increased exposure to various risk factors, many of which are linked to socioeconomic development. Additionally, low- and middle-income countries have access to less than half of the cancer medications deemed essential by the World Health Organization (WHO), while the cancer burden in these areas continues to grow. Without action, nearly 75% of global cancer deaths are projected to occur in these regions within the next decade.
Traditionally, cancer drugs were designed to slow cell replication or kill cancer cells more quickly than healthy ones. While effective for certain cancer types, new methods are now emerging, such as modifying immune cells, utilizing mRNA, and enabling early detection through simple blood tests. Advancing the understanding, prevention, screening, and treatment of cancer is critical to reducing its global burden, but it comes at a rising cost, with global oncology spending projected to surpass $250 billion this year.
With this in mind, biotech and pharmaceutical companies are racing to develop cutting-edge therapies for cancers such as lung, breast, and prostate. As no single cure for cancer exists, developing a cancer drug that can treat multiple types of the disease is highly lucrative. For instance, Merck’s Keytruda generated $25 billion in revenue last year alone. Even in its fourth year on the market, back in 2018, the drug brought in $7.2 billion for the company. Moreover, In 2023, German biotechnology company BioNTech SE and the UK government signed a Memorandum of Understanding (MoU) to deliver personalized mRNA-based cancer immunotherapies to up to 10,000 patients by 2030.
These factors are driving ongoing breakthroughs in the oncology market and enhancing its prospects. Back in 2023, over 25 new oncology active substances were introduced globally, along with the initiation of more than 2,000 new clinical trials. These trials span innovative treatments such as cell and gene therapies, antibody-drug conjugates, multispecific antibodies, and radioligand therapies. In 2023, the global oncology market was valued at around $201.75 billion and is projected to surpass $518.25 billion by 2032, with a compound annual growth rate (CAGR) of 11.3% from 2024 to 2032 (as per estimates by Fortune Business Insights). This growth is driven by the increasing prevalence of cancer, the introduction of new drugs, product approvals, and expanding research in the field.
With that, let’s look at the 10 Worst Cancer Stocks To Buy Now According to Short Sellers.
A hand holding cancer cells with a magnifying glass, highlighting the company’s target of curing diseases.
Our Methodology
To compile our list of the 10 worst cancer stocks to buy according to short sellers, we focused on cancer-related stocks with substantial short interest (at least 10%). Despite this, these stocks remain favored by hedge funds and market analysts. The list is ranked based on the percentage of outstanding shares that have been sold short, in ascending order.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10. Geron Corp. (NASDAQ:GERN)
Short % of Float: 11.65%
Number of Hedge Fund Holders: 26
Geron Corp. (NASDAQ:GERN) is a biotechnology company focused on developing and commercializing cancer therapies, with its primary product being imetelstat, marketed under the brand name Rytelo, an anti-cancer medication.
Leerink Partners recently initiated coverage on Geron Corp. (NASDAQ:GERN), assigning an Outperform rating and setting a price target of $7.00. The firm’s optimism is based on Rytelo’s potential to be a blockbuster treatment for lower-risk myelodysplastic syndrome (LR-MDS). Approved in June 2024, Rytelo is a first-in-class telomerase inhibitor for LR-MDS patients with transfusion-dependent anemia who are intolerant or unresponsive to erythropoiesis-stimulating agents (ESAs). With over 15,000 eligible patients in the U.S. as of 2024 and limited alternative treatments, Leerink Partners projects Rytelo could achieve peak sales of around $1.4 billion in the U.S.
Despite being shorted to some degree, Geron Corp. (NASDAQ:GERN) has built a strong commercial presence and expects national payer coverage by Q1 2025. Financially, the company is in a solid position with $430 million in cash and equivalents as of mid-2024, and its 2024 operating expenses are projected to be between $270 million and $280 million.
In Q2 2024, 26 hedge funds held positions in the company, with Darwin Global Management being the largest shareholder, holding a stake worth $106 million.
9. Immunocore Holdings plc (NASDAQ:IMCR)
Short % of Float: 12.18%
Number of Hedge Fund Holders: 24
Immunocore Holdings plc (NASDAQ:IMCR) is a biotechnology company focused on developing immunomodulatory drugs to treat cancer, infectious diseases, and autoimmune disorders.
In Q2 2024, Immunocore Holdings plc (NASDAQ:IMCR) reported $75 million in revenue from its lead product, marking a 32% year-over-year growth, driven by increased treatment penetration and longer treatment durations. Overall quarterly revenue reached $75.3 million, up from $56.9 million in the same period last year.
While short sellers believe IMCR will fall, analysts seem to disagree. H.C. Wainwright recently reaffirmed its Buy rating on Immunocore Holdings plc (NASDAQ:IMCR), maintaining a $100 price target, citing the company’s solid quarterly performance and progress in its T cell receptor (TCR) immunotherapy programs. Some of the company’s key developments include the expected release of top-line data from a Phase 2 trial of KIMMTRAK for advanced cutaneous melanoma in Q4 2024.
Immunocore Holdings plc (NASDAQ:IMCR) is also advancing its Phase 3 PRISM-MEL301 trial, which is evaluating brenetafusp, another TCR bispecific immunotherapy, in first-line advanced cutaneous melanoma. The trial’s enrollment is projected to accelerate as additional clinical sites become operational.
As of Q2 2024, 24 hedge funds tracked by Insider Monkey held positions in Immunocore Holdings plc (NASDAQ:IMCR), with Baker Bros. Advisors, led by Julian and Felix Baker, being the largest shareholder, holding shares valued at $51.35 million.
8. Merus NV (NASDAQ:MRUS)
Short % of Float: 12.18%
Number of Hedge Fund Holders: 54
Merus NV (NASDAQ:MRUS) is a biotechnology company specializing in the development of antibody-based cancer therapies. The company is advancing several antibody treatments in its pipeline.
Merus recently launched the Phase 3 LiGeR-HN2 trial for petosemtamab, targeting head and neck squamous cell carcinoma (HNSCC) in patients undergoing second- or third-line treatment. The company plans to present additional data from the Phase 1/2 dose optimization cohort later this year. Additionally, Merus NV (NASDAQ:MRUS) aims to initiate the Phase 3 LiGeR-HN1 trial by year-end, evaluating petosemtamab in combination with pembrolizumab.
Stifel has raised its price target for Merus NV (NASDAQ:MRUS) shares to $99.00, driven by promising Phase 1b data for petosemtamab, estimating a market potential of $3 billion, potentially increasing to $4-5 billion with longer treatment durations. BofA Securities also revised its price target on MRUS to $76, maintaining a Buy rating after successful fundraising and encouraging trial results.
As of Q2 2024, 54 hedge funds tracked by Insider Monkey held stakes in Merus NV (NASDAQ:MRUS). Commodore Capital, managed by Egen Atkinson and Michael Kramarz, was the largest shareholder, with a $189.34 million position.
7. Celldex Therapeutics, Inc. (NASDAQ:CLDX)
Short % of Float: 13.06%
Number of Hedge Fund Holders: 34
Celldex Therapeutics, Inc. (NASDAQ:CLDX) is a biopharmaceutical company focused on developing therapeutic monoclonal and bispecific antibodies for various diseases and targeted immunotherapeutics for the treatment of cancer, infectious, and inflammatory diseases.
Celldex Therapeutics, Inc. (NASDAQ:CLDX) recently reported positive Phase 2 clinical trial results for its drug, barzolvolimab, demonstrating significant efficacy in treating chronic inducible urticaria (CIndU), a condition causing hives triggered by external stimuli. This success represents a major advancement toward offering a new treatment option for the estimated 0.5% of the population affected by CIndU.
Stifel initiated coverage on Celldex Therapeutics, Inc. (NASDAQ:CLDX) with a Buy rating, emphasizing the potential of barzolvolimab based on the promising Phase 2 results. Similarly, Wolfe Research assigned an Outperform rating to Celldex Therapeutics, Inc. (NASDAQ:CLDX), suggesting that the company may be an attractive candidate for mergers and acquisitions.
By the end of Q2 2024, 34 hedge funds held positions in Celldex Therapeutics, Inc. (NASDAQ:CLDX). Derrick Tang’s Kynam Capital was the largest hedge fund investor, with a stake valued at over $125.4 million.
6. Removed
The company at the 6th spot was removed because it wasn’t a pure play cancer stock.
5. Cg Oncology Inc. (NASDAQ:CGON)
Short % of Float: 17.72%
Number of Hedge Fund Holders: 27
CG Oncology, Inc. (NASDAQ:CGON) is a company specializing in oncolytic immunotherapy, focusing on developing and commercializing bladder-sparing treatments for bladder cancer patients.
On August 27, Roth/MKM initiated coverage of CG Oncology, Inc. (NASDAQ:CGON) with a Buy rating and a price target of $65.00. This rating is based on the anticipated potential of the company’s drug candidate, cretostimogene, which is expected to be submitted for a Biologics License Application (BLA) in the second half of 2025. Cretostimogene is being developed to treat BCG-unresponsive, high-risk non-muscle invasive bladder cancer (HR-NMIBC). Roth/MKM emphasized the drug’s tolerability as a major advantage, potentially allowing it to compete effectively with other treatments that have faced tolerability issues. The firm is optimistic about the drug’s efficacy for both HR-NMIBC and intermediate-risk NMIBC (IR-NMIBC), projecting global sales of over $2 billion by 2033.
Dr. Vijay Kasturi, the company’s Chief Medical Officer, highlighted cretostimogene’s potential as a non-surgical, bladder-sparing option. The treatment’s adverse events were as expected, with no additional toxicity noted when combined with other drugs.
Additionally, on August 8, CG Oncology, Inc. (NASDAQ:CGON) reported an EPS of $0.28 for the quarter, beating analysts’ consensus estimate of $0.42 by $0.14, with revenue of $0.11 million for the period.
As of the end of Q2 2024, 27 hedge funds held positions in CG Oncology, Inc. (NASDAQ:CGON), with stakes valued at approximately $638.45 million.
4. Nuvalent, Inc. (NASDAQ:NUVL)
Short % of Float: 20.38%
Number of Hedge Fund Holders: 29
Nuvalent, Inc. (NASDAQ:NUVL) is a clinical-stage biopharmaceutical company focused on developing precisely targeted therapies for kinase-driven cancers.
Barclays reaffirmed its Overweight rating on Nuvalent, Inc. (NASDAQ:NUVL) with a price target of $100. This positive outlook comes ahead of the company’s upcoming presentation at the European Society for Medical Oncology (ESMO) on its ALK and ROS1 inhibitor programs. Additionally, an update on the pivotal Phase 2 segment of the ARROS-1 trial is expected, a key milestone for drug development. Nuvalent, Inc. (NASDAQ:NUVL) has also initiated a Phase 1a/1b clinical trial for NVL-330, targeting HER2-altered non-small cell lung cancer to assess safety and efficacy.
The company’s strategy focuses on developing innovative molecules that address the limitations of earlier kinase inhibitors, such as resistance mutations, off-target adverse effects, and insufficient brain penetration. Nuvalent, Inc. (NASDAQ:NUVL) is also targeting other validated drug areas, including ROS1, ALK, and HER2.
As anticipation builds around Nuvalent, Inc. (NASDAQ:NUVL)’s drug candidates and forthcoming updates at the ESMO conference, the firm’s significant market capitalization of $5.72 billion highlights strong investor interest.
As of Q2 2024, 29 hedge funds tracked by Insider Monkey held positions in Nuvalent, Inc. (NASDAQ:NUVL), with James E. Flynn’s Deerfield Management leading the pack with a $1.51 billion investment.
3. Iovance Biotherapeutics, Inc. (NASDAQ:IOVA)
Short % of Float: 24.47%
Number of Hedge Fund Holders: 33
Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), based in San Carlos, California, focuses on developing cell therapies using autologous tumor-infiltrating lymphocytes to target metastatic melanoma and other solid tumors.
Despite being heavily shorted, Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) has delivered an optimistic outlook in its second-quarter 2024 earnings report, showcasing impressive revenue growth fueled by strong demand for its product, Amtagvi. The company recorded Q2 product revenue of $31.1 million and forecasts revenues of $53 million to $55 million for Q3 2024, with full-year expectations ranging from $160 million to $165 million. Looking ahead to 2025, Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) anticipates a significant increase in product revenue to between $450 million and $475 million. These projections have led TD Cowen to reaffirm its Buy rating on IOVA.
The company is also expanding its manufacturing capabilities and advancing its clinical pipeline, with ongoing trials for Amtagvi targeting advanced melanoma and non-small cell lung cancer. Additionally, Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) plans to expand its network of authorized treatment centers to at least 70 by year-end. Despite reporting a net loss of $97.1 million for Q2 2024, the company’s cash position of approximately $449.6 million as of July 24, 2024, is projected to sustain operations through 2026.
In Q2, 33 hedge funds held long positions in Iovance, with a combined stake valued at $712.7 million.
Artisan Small Cap Fund stated the following regarding Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) in its Q2 2024 investor letter:
“Among our top detractors for the quarter were Lattice Semiconductor and Iovance Biotherapeutics, Inc. (NASDAQ:IOVA). Iovance Biotherapeutics is a biotechnology company focused on innovating, developing and delivering novel polyclonal tumor-infiltrating lymphocyte (TIL) cell therapies for cancer patients. The stock rallied significantly in Q1 after announcing that the FDA approved AMTAGVI™ (lifileucel) for advanced melanoma. Now that the scientific risk is behind the company, investor focus has shifted to the company’s commercial execution, and shares experienced weakness after the company reported earnings results. It announced the enrollment of more than 100 patients for therapy; however, this was not enough to alleviate investor concerns about patient attrition. In our view, there is no issue with the efficacy of its life-saving treatment. Headwinds have been caused by challenges in ramping production, which is understandable in the early days. We view these concerns as overblown and remain invested.”
2. ORIC Pharmaceuticals, Inc. (NASDAQ:ORIC)
Short % of Float: 28.47%
Number of Hedge Fund Holders: 20
ORIC Pharmaceuticals, Inc. (NASDAQ:ORIC) is a biotech firm based in California, dedicated to developing innovative treatments for cancer, particularly those resistant to conventional chemotherapy.
Stifel recently initiated coverage of ORIC Pharmaceuticals, Inc. (NASDAQ:ORIC) with a Buy rating and a price target of $20.00. The firm emphasized the company’s potential in the prostate cancer treatment market, particularly with its ORIC-944 product, which is slated to enter Phase 3 trials in 2025. ORIC-944, which targets metastatic castration-resistant prostate cancer (mCRPC), employs PRC2 inhibition combined with androgen receptor pathway inhibitors (ARPIs). Stifel noted that PRC2 inhibition could achieve success similar to the ARPI class, which generated approximately $5 billion in sales over the past decade. Additionally, ORIC Pharmaceuticals, Inc. (NASDAQ:ORIC) is developing a second asset, an EGFR TKI, expected to produce valuable data from Phase 1b trials in early 2025.
The company recently bolstered its financial position with a $125 million private placement from healthcare specialist funds in January 2024. As of March 31, 2024, ORIC Pharmaceuticals, Inc. (NASDAQ:ORIC) reported $331.5 million in cash, cash equivalents, and investments, which it anticipates will support its operations through late 2026.
As of June 30, Andreas Halvorsen’s Viking Global is the largest shareholder in ORIC Pharmaceuticals, Inc. (NASDAQ:ORIC), with a stake valued at $28.28 million.
1. Allogene Therapeutics, Inc. (NASDAQ:ALLO)
Short % of Float: 28.65%
Number of Hedge Fund Holders: 23
Allogene Therapeutics, Inc. (NASDAQ:ALLO) focuses on developing and commercializing allogeneic CAR-T (chimeric antigen receptor T) therapies for cancer, with a pipeline featuring several candidates for both hematological and solid tumors.
Oppenheimer initiated coverage of Allogene Therapeutics, Inc. (NASDAQ:ALLO) with an Outperform rating and a reduced price target of $11, down from $13. The firm’s analysis suggests that CAR-T therapies perform effectively in low-disease settings, based on translational data and recent experiences with CAR-Ts in autoimmunity. Oppenheimer anticipates that ALLO-329 will be ready for a new drug application filing in Q1 2025. Conversely, Citi has increased its price target for Allogene Therapeutics, Inc. (NASDAQ:ALLO) to $8 from $7, maintaining a Buy rating following the Q2 report. Citi’s update highlights the company’s steady progress in advancing its realigned pipeline.
Despite facing attention from short sellers, hedge funds appear to be bullish on Allogene Therapeutics, Inc. (NASDAQ:ALLO). In Q2 2024, 23 hedge funds held positions in the biotechnology company, up from 18 in the previous quarter. The largest stakeholder was Michael Rockefeller and Karl Kroeker’s Woodline Partners, with 4.35 million shares valued at $10.15 million.
Considering all the factors mentioned, it’s clear that cancer stocks offer significant potential. However, with the artificial intelligence revolution just beginning, there are lesser-known AI stocks trading at attractive valuations that could offer even greater promise for portfolio diversification. If you’re seeking an AI stock with even more promise than those on our list and trading at less than 5 times its earnings, check out our report about the cheapest AI stock.
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