5 Best Small-Cap Biotech Stocks with Massive Potential According to Hedge Funds

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1. Apellis Pharmaceuticals, Inc. (NASDAQ:APLS)

Number of Hedge Fund Shareholders: 53

Hedge funds poured into Apellis Pharmaceuticals, Inc. (NASDAQ:APLS) in even greater numbers during Q2, as the number of funds long APLS rose by 27% to reach a new all-time high and propel it to the top of the list of best small-cap biotech stocks. Kurt Von Emster’s VenBio Select Advisor owns an eye-popping 11,111,111 shares of APLS as of June 30.

Apellis Pharmaceuticals, Inc. (NASDAQ:APLS) shares fell off a cliff in mid-July after the Research and Safety in Therapeutics (ReST) Committee of the American Society of Retinal Specialists raised safety concerns about the company’s eye treatment Syfovre. The company tried to calm investors by noting that incidences of occlusive retinal vasculitis, a form of severe eye inflammation that leads to loss of vision, were extremely rare. Analsyts weren’t convinced however, with several dramatically slashing their price targets on the stock in the wake of the news.

Those safety concerns overshadowed a strong Q2 earnings report for Apellis Pharmaceuticals, Inc. (NASDAQ:APLS), as Syfovre sales jumped to $67.3 million during the quarter from just $18.4 million in Q1, outpacing estimates. Those sales figures accounted for 71% of Apellis’ Q2 revenue, which is why so much rides on the market’s response to the latest safety concerns. If Syfovre’s sales continue to impress in the second half of this year, APLS could be poised for a big bounceback as worries over the impact those safety concerns will have on sales abates.

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