12 Best Performing Biotech Stocks in 2022

Published on December 28, 2022 at 10:15 pm by Hamna Asim in Hedge Funds, News

In this article, we discuss 12 best performing biotech stocks in 2022. If you want to see more stocks in this selection, check out 5 Best Performing Biotech Stocks in 2022.

Fitch Ratings has assigned a Neutral rating to the global pharmaceutical and biotech industry, which indicates the assumption of a collaborative operating backdrop in 2023, although inflationary pressures and a tight interest rate environment will still persist. Fitch expects demand in the global biotech industry to normalize as fundamentals yet again are pointing towards innovation and growth. This outlook is also supported by feasible secular trends like an increasing and aging global population, high prevalence of chronic diseases, and easier healthcare accessibility worldwide.

From 2015 through 2021, biotech saw drastic revenue generation and strong financing. There was meaningful top-line growth in 2021 as public company revenues climbed 35%, from $160.2 billion to $216.7 billion, largely due to COVID-19 medications and vaccines. While retail and hospitality sectors declined, capital invested in biotech startups, IPOs, and financing innovation reached an all-time high of $104.7 billion in February 2021. In 2020 and 2021, 50 new molecular entities were authorized by the FDA, an increase from an annual total of 29 a decade earlier. Presently, biotechs account for 65% of the approximately 6,000 clinical asset candidates in active development, and this ratio is forecasted to experience drastic growth over the next 10 years.

However, despite an uncertain economic backdrop heading into 2023, biotech alliances continue to emerge, and mergers and acquisitions are typically supported as the industry needs to elevate growth even amid global economic and fiscal slowdowns. For well-rounded exposure to the biotech industry, investors should focus on the countries which are making the biggest strides in the sector. (see 12 Most Advanced Countries in Biotechnology) It is also important to find stocks which offer upside potential for future gains (see 10 Biotech Stocks with the Biggest Upside).

While investors usually pick up popular stocks like Pfizer Inc. (NYSE:PFE), Moderna, Inc. (NASDAQ:MRNA), and Novavax, Inc. (NASDAQ:NVAX), we discuss the best performing biotech stocks in this article.

Our Methodology

We selected the following biotech stocks based on positive share price gains year-to-date as of December 28. We have assessed the hedge fund sentiment from Insider Monkey’s database of 920 elite hedge funds tracked as of the end of the third quarter of 2022. The list is arranged according to the number of hedge fund holders in each firm. This means our list demonstrates the best performing biotech stocks to buy according to hedge funds. We also discussed analyst coverage, business fundamentals, and the future share catalysts associated with these firms.

Photo by National Cancer Institute on Unsplash

Best Performing Biotech Stocks in 2022

12. Merrimack Pharmaceuticals, Inc. (NASDAQ:MACK)

Number of Hedge Fund Holders: 5

YTD Share Price Gain as of December 28: 163.73%

Merrimack Pharmaceuticals, Inc. (NASDAQ:MACK) was incorporated in 1993 and is headquartered in Cambridge, Massachusetts. The company specializes in developing drugs for the treatment of cancer. On November 9, Merrimack Pharmaceuticals, Inc. (NASDAQ:MACK) stock climbed nearly 183% after its French partner for cancer therapy Onivyde, Ipsen S.A. announced that the drug as a combination therapy met the core endpoint in a late-stage trial for a form of pancreatic cancer. As of September 30, 2022, Merrimack had cash and cash equivalents of $13.1 million, compared to $14.6 million as of September 30, 2021.

Merrimack Pharmaceuticals, Inc. (NASDAQ:MACK) shares are up nearly 164% year-to-date as of December 28, making it one of the best performing biotech plays this year.

According to Insider Monkey’s data, 5 hedge funds were long Merrimack Pharmaceuticals, Inc. (NASDAQ:MACK) at the end of the third quarter of 2022, compared to 6 funds in the prior quarter. Noah Levy and Eugene Dozortsev’s Newtyn Management is the biggest stakeholder of the company, with 1.7 million shares worth $6.62 million.

In addition to Pfizer Inc. (NYSE:PFE), Moderna, Inc. (NASDAQ:MRNA), and Novavax, Inc. (NASDAQ:NVAX), Merrimack Pharmaceuticals, Inc. (NASDAQ:MACK) is one of the top biotech stocks to invest in.

11. Aerovate Therapeutics, Inc. (NASDAQ:AVTE)

Number of Hedge Fund Holders: 11

YTD Share Price Gain as of December 28: 155.44%

Aerovate Therapeutics, Inc. (NASDAQ:AVTE) is a Massachusetts-based clinical-stage biopharmaceutical company focused on the development of drugs that enhance the lives of patients with rare cardiopulmonary diseases in the United States. Aerovate Therapeutics, Inc. (NASDAQ:AVTE) had cash, cash equivalents, and short-term investments of $142.6 million as of September 30, 2022, compared to $167.4 million as of December 31, 2021. The company expects to sufficiently fund operations into the second half of 2025, based on its present operating plan.

On December 12, Wedbush analyst Andreas Argyrides raised the price target on Aerovate Therapeutics, Inc. (NASDAQ:AVTE) to $54 from $27 and maintained an Outperform rating on the shares. Following Gossamer’s Phase 2 TORREY results on December 6, the analyst consulted with PAH experts who see seralutinib as validating inhaled TKIs despite falling behind expectations. While refining enrollment criteria to include more at-risk PAH patients increases the probability of success in the pivotal trial, the analyst also has more conviction in AV-101 due to the topline results.

According to Insider Monkey’s data, 11 hedge funds were bullish on Aerovate Therapeutics, Inc. (NASDAQ:AVTE) at the end of Q3 2022, compared to 8 funds in the earlier quarter. Peter Kolchinsky’s RA Capital Management held the largest position in the company, with 8.2 million shares worth $137 million.

10. Astria Therapeutics, Inc. (NASDAQ:ATXS)

Number of Hedge Fund Holders: 13

YTD Share Price Gain as of December 28: 145.83%

Astria Therapeutics, Inc. (NASDAQ:ATXS) was incorporated in 2008 and is based in Boston, Massachusetts. It is a biopharmaceutical company engaged in the discovery, development, and commercialization of therapeutics for rare allergic and immunological diseases in the United States. Astria Therapeutics, Inc. (NASDAQ:ATXS) stock has climbed nearly 146% year-to-date as of December 28, making it one of the best performing biotech names in 2022.

On December 15, Astria Therapeutics, Inc. (NASDAQ:ATXS) announced preliminary data from a phase 1a trial of its medicine STAR-0215, which demonstrated rapid and sustained drug levels in healthy people. The company confirmed that the results establish an early proof of concept of STAR-0215 as a potential long-acting preventative therapy for hereditary angioedema.

H.C. Wainwright analyst Joseph Pantginis on December 19 raised the price target on Astria Therapeutics, Inc. (NASDAQ:ATXS) to $20 from $13 and maintained a Buy rating on the shares. The Phase 1a healthy volunteer study for STAR-0215 offered a “significant profile building data for the antibody,” the analyst wrote in a research note.

According to Insider Monkey’s data, 13 hedge funds were bullish on Astria Therapeutics, Inc. (NASDAQ:ATXS) at the end of Q3 2022, compared to 9 funds in the prior quarter. The collective stakes held by elite funds in the third quarter amounted to $60 million, up from $10.4 million in the second quarter.

9. AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO)

Number of Hedge Fund Holders: 14

YTD Share Price Gain as of December 28: 184.06%

AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) is an oncology-focused biopharmaceutical company, focused on developing and commercializing medicines for patients with cancer. The company was incorporated in 2001 and is headquartered in Boston, Massachusetts. On October 18, LG Chem announced that it will acquire AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) for $15 per share in an all-cash transaction with an implied equity value of $566 million on a fully diluted basis. The transaction is expected to close in early 2023. AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) reported a revenue of $30.4 million, up 100.4% year-over-year, outperforming Wall Street estimates by $0.54 million. As of December 28, AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) stock has climbed 184% year-to-date, making it one of the best biotech plays this year.

On November 8, Stifel analyst Stephen Willey downgraded AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) to Hold from Buy with an unchanged price target of $15 following the proposed acquisition by South Korea-based LG Chem in an all-cash transaction which values the company at $15 per share. The analyst does not expect any additional bidders to emerge.

According to Insider Monkey’s data, 14 hedge funds were long AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) at the end of Q3 2022, compared to 9 funds in the prior quarter. Orin Hirschman’s AIGH Investment Partners is the largest stakeholder of the company, with 2.7 million shares worth $22.5 million.

8. Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM)

Number of Hedge Fund Holders: 16

YTD Share Price Gain as of December 28: 171.79%

Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) is a commercial-stage biopharmaceutical company specializing in the development and commercialization of therapeutics for the treatment of rare genetic diseases of obesity. On November 1, Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) announced that the FDA issued Breakthrough Therapy Designation for its lead candidate setmelanotide as a treatment for hypothalamic obesity. Similarly, on November 21, the company disclosed that the British authorities expanded the marketing authorization for its weight loss therapy Imcivree in the UK. Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) is one of the best performing stocks in 2022.

On August 7, Goldman Sachs analyst Corinne Jenkins upgraded Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) to Buy from Neutral with a $28 price target. The analyst believes that the outlook for Imcivree was transformed by initial Phase 2 data in patients with Hypothalamic Obesity, which points to a high probability of clinical success in this indication, and she also sees a peak sales opportunity relative to other indications where Imcivree is in development.

According to Insider Monkey’s data, Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) was part of 16 hedge fund portfolios at the end of September 2022, with combined stakes worth $431.5 million, compared to 16 funds in the prior quarter worth $57.8 million. Julian Baker and Felix Baker’s Baker Bros. Advisors is the biggest position holder in the company, with 6 million shares worth $148.5 million.

7. ADMA Biologics, Inc. (NASDAQ:ADMA)

Number of Hedge Fund Holders: 18

YTD Share Price Gain as of December 28: 146.94%

ADMA Biologics, Inc. (NASDAQ:ADMA) is a New Jersey-based biopharmaceutical company, engaged in developing, manufacturing, and marketing specialty plasma-derived biologics for the treatment of immune deficiencies and infectious diseases in the United States and internationally. ADMA Biologics, Inc. (NASDAQ:ADMA) is one of the premier biotech stocks to invest in, with shares climbing 147% year-to-date as of December 28.

On December 7, ADMA Biologics, Inc. (NASDAQ:ADMA) priced its underwritten public offering of 20,979,020 shares of its common stock at $2.86 each. Gross proceeds are estimated to be approximately $60 million. Net proceeds will be used to quicken commercialization and production activities, complete plasma center buildout and receive FDA approvals, to finish post FDA marketing approval research and development projects, and for working capital, capital expenditures, and general corporate purposes.

Mizuho analyst Anthony Petrone initiated coverage of ADMA Biologics, Inc. (NASDAQ:ADMA) on October 12 with a Buy rating and a $5 price target. He cited the “still accelerating” adoption of ASCENIV, ongoing BIVIGAM share gains, and benefits from a transition to an integrated plasma supply chain. He expects 40% gross margins from a combination of supply chain benefits and mix, the analyst told investors.

According to Insider Monkey’s data, 18 hedge funds were bullish on ADMA Biologics, Inc. (NASDAQ:ADMA) at the end of September 2022, compared to 13 funds in the last quarter. Joseph Edelman’s Perceptive Advisors is the largest stakeholder of the company, with nearly 11 million shares worth $26.5 million.

6. Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX)

Number of Hedge Fund Holders: 18

YTD Share Price Gain as of December 28: 168.64%

Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) is a Florida-based commercial-stage biopharmaceutical company, engaged in the development and commercialization of therapies for rare debilitating, chronic neuromuscular, and neurological diseases in the United States. Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) is one of the best performing biotech stocks in 2022.

On November 9, Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) reported a Q3 non-GAAP EPS of $0.26 and a revenue of $57.24 million, outperforming Wall Street estimates by $0.07 and $3.55 million, respectively. The company lifted its forecast for total revenues in full-year 2022 to be in the range $205 million to $210 million, representing a 46%-49% increase in total revenues compared to 2021, while the consensus revenue came in at $205.03 million.

Piper Sandler analyst Joseph Catanzaro on December 19 raised the price target on Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) to $20 from $18 and reiterated an Overweight rating on the shares. The analyst noted that the company fulfilled its expectations of business development activity before year-end with the acquisition of U.S. commercial rights to Fycompa.

According to Insider Monkey’s data, 18 hedge funds were long Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) at the end of Q3 2022, compared to 16 funds in the prior quarter. James E. Flynn’s Deerfield Management is the biggest stakeholder of the company, with 4.9 million shares worth $62.8 million.

Like Pfizer Inc. (NYSE:PFE), Moderna, Inc. (NASDAQ:MRNA), and Novavax, Inc. (NASDAQ:NVAX), Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) is one of the best stocks for exposure to the biotech sector.

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