In this piece, we will take a look at the 12 best biotechnology stocks to buy under $20. For more stocks, head on over to 5 Best Biotech Stocks To Buy Under $20.
The biotechnology industry is one of the hottest sectors right now, particularly in the aftermath of the coronavirus pandemic since it was this industry that developed messenger ribonucleic acid (mRNA) vaccines that put an end to the pandemic. However, biotechnology does not only target viruses in its drug development efforts. While mRNA might have been popularized due to the coronavirus pandemic, the technology which programs the human body to produce certain proteins was initially developed as a cancer treatment.
As a whole, the biotechnology sector relies heavily on technology for progress. This has enabled it to leverage modern day advances in computing to suit its purposes and drug development. For instance, artificial intelligence, which has recently caught the public’s eye due to the success of the chatbot ChatGPT, was already being used by drugmakers to sift through vast amounts of data and generate insights such as those that characterize the differences between healthy and cancerous cells. This is part of efforts to reduce the massive costs of drug development which often stand in billions of dollars and require drugmakers to run trial and error experiments as part of the drug discovery process.
At the same time, the proliferation of the internet of things (IoT) gadgets such as smartwatches have also provided biotechnology companies with novel means of collecting data for clinical trials. For instance, Invitae Corporation (NYSE:NVTA) partnered up with Apple Inc. (NASDAQ:AAPL) in 2019 to use the data from the latter’s Apple Watch as part of researching the genetic causes of cardiovascular disease. Additionally, if you thought that biotechnology was limited to Earthly use, you’d be wrong. The National Aeronautics and Space Administration (NASA) is testing chips that are imbued with human tissue in space. Simply called Tissue Chips, these contain muscle bundles of cells from people younger than 40 years or older than 60 years to simulate muscle wastage. The simple premise behind this experiment is to use microgravity conditions that see muscle age faster than on Earth to speed up the changes to the muscle by zapping them with electricity and monitoring the changes. Some of the medical areas that the investigation aims to study are osteoarthritis, the blood brain barrier, the interaction of the respiratory and immune systems to fight infection, and high levels of protein in the urine.
Tissue Chips are not the only biotechnology products that have made their way and will make their way into space. Another rather novel technology, which aims to use a special membrane to manufacture proteins, can make its way to the International Space Station (ISS) soon. This tech, developed by the Californian startup Machine Bio, Inc., won a $500,000 grant in February 2023 to test the feasibility of microgravity conditions for its manufacturing process.
All of this point to the reinvigoration of growth in the sector. A research report from BioSpace believes that the biotechnology market was worth $852 billion in 2020, and despite this massive size, it will grow through a compounded annual growth rate (CAGR) of 17.8% between 2021 and 2023 to sit at an estimated $3.4 trillion by the end of the forecast period. The research firm believes that favorable government incentives and higher investments in the sector will drive this growth. It adds that in terms of applications, the bioinformatics sector will outpace the broader industry by growing at a 21.5% CAGR and the health application segment, which held the largest market share of 48.7% in 2021, will continue this trend moving forward into the future.
Finally, even though biotechnology companies stretch their wings and look to space, the COVID-19 coronavirus continues to be a threat on Earth. Nowhere else is this clearer than in a recent earnings call of Moderna, Inc. (NASDAQ:MRNA), during which its management shared that COVID continued be a leading cause of death in 2022, as it outlined:
In our discussions with commercial customers in the U.S., it is clear to us that our customers recognize that COVID is still a substantial health burden. Throughout 2022, COVID continued to be a leading cause of hospitalizations and deaths. If you look to the chart on the left hand side, what you will see here is data available through September of 2022 COVID was the third leading cause of death in the United States only after heart disease and cancer. And if you look to this right-hand side, 4 months for the fall and winter season from October 1, 2022, 2023, hospitalizations from COVID in the U.S. are nearly 450,000, more than double from flu and nearly 3x higher than RSV in that same 4-month period. There continues to be a clear need to protect against severe COVID infections and our customers recognize that.
Given this need, we estimate the U.S. fall 2023 COVID market volume to be approximately 100 million doses. We base this assumption after looking at 2022 vaccination rates and including potential recommendation for two-dose booster series for high risk individuals. Taken together, the doses administered represent roughly 30% of the U.S. population.
Today we’ll look at some of the best affordable biotechnology stocks that are also hedge fund favorites. Out of these, the top picks are Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), Roivant Sciences Ltd. (NASDAQ:ROIV), and Bausch Health Companies Inc. (NYSE:BHC).
Photo by Mufid Majnun on Unsplash
Our Methodology
We started off by identifying the most popular biotech stocks among the 943 hedge funds tracked by Insider Monkey as of the end of the fourth quarter of 2022. Then, their share price was determined and the top twelve picks under $20 are listed below.
Best Biotech Stocks To Buy Under $20
12. 89bio, Inc. (NASDAQ:ETNB)
Number of Hedge Fund Investors in Q4 2022: 31
89bio, Inc. (NASDAQ:ETNB) is an American biotechnology company headquartered in San Francisco, California. The firm develops treatments for liver and heart diseases.
SVB Securities maintained a $12 share price target on 89bio, Inc. (NASDAQ:ETNB) in March 2023 as it outlined that the firm’s metabolic disease treatments remain the best in class. 31 of the 943 hedge funds polled by Insider Monkey during Q4 2022 had bought the firm’s shares.
89bio, Inc. (NASDAQ:ETNB)’s largest investor in our database is Peter Kolchinsky’s RA Capital Management which owns 8.9 million shares that are worth $114 million.
Roivant Sciences Ltd. (NASDAQ:ROIV), Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), and Bausch Health Companies Inc. (NYSE:BHC) are some great biotechnology stocks under $20.
11. Exelixis, Inc. (NASDAQ:EXEL)
Number of Hedge Fund Investors in Q4 2022: 31
Exelixis, Inc. (NASDAQ:EXEL) is a cancer treatment provider headquartered in Alameda, California. The firm develops drugs to target diseases such as tumors, kidney cancer, thyroid cancer, lymphoma, and heart problems. It is a top biotechnology stock pick when it comes to hedge fund sentiment.
As of the fourth quarter of 2022, 31 of the 943 hedge funds part of Insider Monkey’s database had invested in Exelixis, Inc. (NASDAQ:EXEL). The firm’s largest shareholder is Jim Simons’ Renaissance Technologies which owns 14.9 million shares that are worth $239 million.
10. Insmed Incorporated (NASDAQ:INSM)
Number of Hedge Fund Investors in Q4 2022: 32
Insmed Incorporated (NASDAQ:INSM) develops treatments for lung diseases, fibrosis, hypertension, bronchiectasis, and others. It is based in Bridgewater, New Jersey.
Insider Monkey dug through 943 hedge fund portfolios for last year’s December quarter and found out that 32 had held a stake in Insmed Incorporated (NASDAQ:INSM). Out of these, William Leland Edwards’ Palo Alto Investors is the firm’s largest shareholder. It owns 5.8 million shares that are worth $117 million.
9. BELLUS Health Inc. (NASDAQ:BLU)
Number of Hedge Fund Investors in Q4 2022: 32
BELLUS Health Inc. (NASDAQ:BLU) is a Canadian company headquartered in Laval, Canada. The firm develops treatments for chronic cough and is a great biotechnology stock pick.
BELLUS Health Inc. (NASDAQ:BLU)’s refractory chronic cough treatment called BLU-5937 is currently in Phase 3 clinical trials. 32 of the 943 hedge funds part of Insider Monkey’s Q4 2022 survey had held a stake in the company. Peter Kolchinsky’s RA Capital Management is BELLUS Health Inc. (NASDAQ:BLU)’s largest hedge fund shareholder since it owns 12.4 million shares that are worth $102 million.
8. Nuvation Bio Inc. (NYSE:NUVB)
Number of Hedge Fund Investors in Q4 2022: 33
Nuvation Bio Inc. (NYSE:NUVB) develops oncology treatments to target different diseases such as tumors, breast cancer, ovarian cancer, and prostate cancer. Additionally, its products also aid other cancer drugs in their fight against the deadly disease. The company is based in New York, New York.
Insider Monkey profiled 943 hedge funds for their December quarter of 2022 shareholdings and found out that 33 had invested in Nuvation Bio Inc. (NYSE:NUVB).
7. SomaLogic, Inc. (NASDAQ:SLGC)
Number of Hedge Fund Investors in Q4 2022: 33
SomaLogic, Inc. (NASDAQ:SLGC) is a bioinformatics company whose platforms allow for protein detection, discovery, and analysis. The company is headquartered in Boulder, Colorado.
By the end of last year’s fourth quarter, 33 of the 943 hedge funds polled by Insider Monkey had invested in SomaLogic, Inc. (NASDAQ:SLGC). The firm’s largest investor in our database is Eli Casdin’s Casdin Capital which owns 12.6 million shares that are worth $31 million.
6. Elanco Animal Health Incorporated (NYSE:ELAN)
Number of Hedge Fund Investors in Q4 2022: 33
Elanco Animal Health Incorporated (NYSE:ELAN) develops vaccines, antibiotics, drugs, and other treatments for animals. It is headquartered in Greenfield, Indiana.
Insider Monkey’s Q4 2022 survey of 943 hedge funds revealed that 33 had held a stake in the company. Elanco Animal Health Incorporated (NYSE:ELAN)’s largest hedge fund shareholder in our database is D.E. Shaw’s D E Shaw which owns 8.4 million shares that are worth $102 million.
Along with Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), Roivant Sciences Ltd. (NASDAQ:ROIV), and Bausch Health Companies Inc. (NYSE:BHC), Elanco Animal Health Incorporated (NYSE:ELAN) is a great cheap biotechnology stock to buy as shown by hedge fund interest.
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Disclosure: None. 12 Best Biotech Stocks To Buy Under $20 is originally published on Insider Monkey.