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14 Best Biotech Stocks To Buy According To Hedge Funds

In this piece, we will take a look at 14 best biotechnology stocks to buy according to hedge funds. For more stocks, head on over to 5 Best Biotech Stocks To Buy According To Hedge Funds.

Biotechnology is one of the hottest sectors these days. A handful of industries, such as space exploration, artificial intelligence, and biotechnology, are making rapid leaps forward. For biotechnology, the greatest stimulus has been the coronavirus pandemic as the industry was solely responsible for bailing humanity out of the devastating crisis.

Simply put, biotechnology is the use of biological raw materials to make vaccines and other products with them. This is in sharp contrast to traditional pharmaceutical applications that use plants and other raw materials to make medicines. Through biotechnology, firms such as Pfizer Inc. (NYSE:PFE), Moderna, Inc. (NASDAQ:MRNA), and BioNTech SE (NASDAQ:BNTX) were able to develop the revolutionary messenger ribonucleic acid (mRNA) vaccines that were able to effectively reduce the severity of the disease. mRNA is simply a storage vehicle for instructions that program cells to produce certain kinds of proteins. For the coronavirus vaccine, these proteins fight the virus molecules and protect the recipient against the disease.

Apart from mRNA, there are dozen of other applications for biotechnology as well which are not limited to human health either. The sector is responsible for having saved countless lives over the past few decades simply by enabling the production of insulin. While insulin was initially produced by pigs, naturally there aren’t enough pigs in the world to meet the needs of all diabetics. To solve this problem, biotechnology enabled insulin makers to clone the human gene responsible for making insulin in bacteria and produce as much of the life saving substance as needed. Apart from insulin, other sectors such as gene therapy, vaccine vegetables, and diagnosis are other areas that are a crucial part of the biotechnology industry.

Moving forward from human health, other areas benefiting from biotechnology are chemicals production and agriculture as organic compounds enable significant streamlining of these industries. These use cases naturally end up leading to stunning valuations of the industry. For instance, a research report from Grand View Research outlines that the biotechnology industry was worth a whopping $1.37 trillion last year. From 2023 until 2030, the industry is slated to grow at a compounded annual growth rate (CAGR) of 13.96% – a rather high rate when we consider the large size of the sector. This growth rate can ensure that the biotechnology industry is worth $3.88 trillion by the end of the forecast period. Grand View Research adds that one of the biggest sectors in the market was DNA sequencing, as it accounted for 16.5% of the market and grew due to the dropping costs of this technology. In terms of growth, the research firm believes that one of the fastest growing segments will be nanobiotechnology, which is expected to outpace the broader market in growth by increasing by 14.87%. Application wise, healthcare was unsurprisingly the largest sector as it represented more than half of the total market.

One major drug in the biotechnology industry that is making waves these days is Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)’s DUPIXENT. This is a treatment for patients with chronic obstructive pulmonary disorder (COP) – a devastating disease stemming from lung damage mostly in former smokers. At the firm’s latest earnings call, management shared the remarkable impact that this drug is making, as they outlined:

The first quarter of 2023 delivered multiple significant milestones for Regeneron and for our collaborations, from the positive DUPIXENT Phase III COPD data to progress in our oncology pipeline, as well as exciting new landmarks from our genetic medicines programs. Starting with DUPIXENT. In March, together with our Sanofi collaborators, we announced that DUPIXENT was the first immune mechanism of action treatment to produce statistically significant and clinically meaningful results in a Phase III trial for COPD in over a decade. Our BOREAS trial enrolled COPD patients with moderate to severe disease and evidence of type 2 inflammation. DUPIXENT-treated patients demonstrated a clinically meaningful 30% reduction in exacerbations, a significant improvement in lung function as well as quality of life benefits: an impressive trifecta in a potential paradigm-changing treatment for this deadly disease.

We are looking forward to presenting the detailed BOREAS results in a late-breaking presentation at the upcoming American Thoracic Society Meeting later this month. We also plan to discuss these exciting results with regulatory authorities and expect to report results mid next year for the replicate Phase III NOTUS study. I would remind you that we are also trying to address an overlapping COPD population with our IL-33 antibody, which is in Phase III studies based on positive Phase II proof-of-concept data. This approach is further supported by genetic analysis from our Regeneron Genetics Center, which demonstrated association of loss of function in IL-33 with reduced COPD risk. Similar genetic analysis supported the role for a DUPIXENT benefit in COPD.

With these impressive details in mind, let’s take a look at some of the top biotechnology stocks that hedge funds are piling into, out of which the top picks are Merck & Co., Inc. (NYSE:MRK), Johnson & Johnson (NYSE:JNJ), and AbbVie Inc. (NYSE:ABBV).

Our Methodology

To compile our list of the best biotechnology stocks according to hedge funds, we first made a list of all major biotechnology companies. Then, the number of hedge fund investors that had owned their shares was determined through Insider Monkey’s first quarter of 2023 survey, and the top fifteen biotechnology companies according to hedge funds are listed below.

Best Biotech Stocks To Buy According To Hedge Funds

14. Seagen Inc. (NASDAQ:SGEN)

Number of Hedge Fund Investors In Q1 2023: 47

Seagen Inc. (NASDAQ:SGEN) is an American company headquartered in Bothell, Washington. The firm primarily focuses on developing treatments for cancer. Its products target several kinds of cancers such as lymphoma, breast cancer, cervical cancer, and more.

After digging through 943 hedge funds for their first quarter of 2023 investments, Insider Monkey discovered that 47 had invested in Seagen Inc. (NASDAQ:SGEN). Along with Merck & Co., Inc. (NYSE:MRK), Johnson & Johnson (NYSE:JNJ), and AbbVie Inc. (NYSE:ABBV), it is a favorite hedge fund biotech stock pick.

13. United Therapeutics Corporation (NASDAQ:UTHR)

Number of Hedge Fund Investors In Q1 2023: 51

United Therapeutics Corporation (NASDAQ:UTHR) focuses on several different diseases such as hypertension, lung disorders, and fibrosis. The firm was set up in 1996 and it is headquartered in Silver Spring, Maryland.

Insider Monkey’s first quarter of 2023 survey revealed that 51 had bought a stake in the company. Out of these United Therapeutics Corporation (NASDAQ:UTHR)’s largest hedge fund investor is Kurt Von Emster’s VenBio Select Advisor since it owns 2.8 million shares that are worth $642 million.

12. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)

Number of Hedge Fund Investors In Q1 2023: 54

Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) markets different products such as medicines for inflammatory conditions, blindness, cancer, heart diseases, and others. The firm is based in 1988 and it operates out of Tarrytown, New York.

54 of the 943 hedge funds profiled by Insider Monkey for their Q1 2023 shareholdings had bought Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)’s shares. The firm’s largest hedge fund investor is Ken Griffin’s Citadel Investment Group with a $239 million stake.

11. BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)

Number of Hedge Fund Investors In Q1 2023: 56

BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) is based in San Rafael, California. It develops enzyme replacement therapies, purified proteins, and treatments for metabolic diseases.

As of March 2023, 56 of the 943 hedge funds part of Insider Monkey’s database had held a stake in the firm. BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)’s largest investor in our database is Kurt Von Emster’s VenBio Select Advisor since it has a $383 million investment.

10. Amgen Inc. (NASDAQ:AMGN)

Number of Hedge Fund Investors In Q1 2023: 57

Amgen Inc. (NASDAQ:AMGN) is one of the older companies on our list since it was set up in 1983. It is also one of the most successful biotechnology companies, having developed treatments for a laundry list of diseases including anemia, migraine, leukemia, osteoporosis, cancer, and others.

By the end of this year’s first quarter, 57 investors out of the 943 profiled by Insider Monkey had bought Amgen Inc. (NASDAQ:AMGN)’s shares. The firm’s largest shareholder is John Overdeck and David Siegel’s Two Sigma Advisors with a $404 million stake that comes through 1.6 million shares.

9. IQVIA Holdings Inc. (NYSE:IQV)

Number of Hedge Fund Investors In Q1 2023: 60

IQVIA Holdings Inc. (NYSE:IQV) is a back end biotechnology company based in Durham, North Carolina. The firm provides analytics, management, and monitoring services to the biotechnology industry.

After digging through 943 hedge fund portfolios for 2023’s March quarter, Insider Monkey discovered that 60 had held a stake in the firm. IQVIA Holdings Inc. (NYSE:IQV)’s largest investor is Thomas Steyer’s Farallon Capital since it has a $638 million stake.

8. Gilead Sciences, Inc. (NASDAQ:GILD)

Number of Hedge Fund Investors In Q1 2023: 60

Gilead Sciences, Inc. (NASDAQ:GILD) makes vaccines and treatments for the coronavirus, hepatitis, and other diseases. It is headquartered in Foster City, California.

60 of the 943 hedge funds part of Insider Monkey’s database had invested in Gilead Sciences, Inc. (NASDAQ:GILD) during Q1 2023. Out of these, the firm’s largest investor is Jim Simons’ Renaissance Technologies with an $878 million stake.

7. Biogen Inc. (NASDAQ:BIIB)

Number of Hedge Fund Investors In Q1 2023: 67

Biogen Inc. (NASDAQ:BIIB) develops treatments for neurological diseases. It was set up in 1978 and operates out of Cambridge, Massachusetts.

As of March 2023, 67 of the 943 hedge funds studied by Insider Monkey had bought the firm’s shares. Biogen Inc. (NASDAQ:BIIB)’s largest hedge fund shareholder is D.E. Shaw’s D E Shaw through a $370 million investment.

6. Bristol-Myers Squibb Company (NYSE:BMY)

Number of Hedge Fund Investors In Q1 2023: 69

Bristol-Myers Squibb Company (NYSE:BMY) is one of the largest biopharmaceutical companies in the world. Its products target cancer, myeloma, arthritis, and other diseases.

Insider Monkey’s first quarter of 2023 survey of 943 hedge funds revealed that 69 had invested in Bristol-Myers Squibb Company (NYSE:BMY). Its largest investor is Richard S. Pzena’s Pzena Investment Management with a $312 million stake.

Merck & Co., Inc. (NYSE:MRK), Bristol-Myers Squibb Company (NYSE:BMY), Johnson & Johnson (NYSE:JNJ), and AbbVie Inc. (NYSE:ABBV) are some biotechnology stocks finding favor with the hedge funds.

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Disclosure: None. 14 Best Biotech Stocks To Buy According To Hedge Funds is posted on Insider Monkey.

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

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The “Toll Booth” Operator of the AI Energy Boom

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The Hedge Fund Secret That’s Starting to Leak Out

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A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

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Should I put my money in Artificial Intelligence?

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Click to continue reading…