We recently compiled a list of the 10 Worst Cancer Stocks To Buy Now According to Short Sellers. In this article, we are going to take a look at where Nuvalent, Inc. (NASDAQ:NUVL) stands against the other cancer stocks.
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.
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).
A physician standing in a lab, with vials of biopharmaceuticals in hand.
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.
Overall NUVL ranks 4th on our list of the worst cancer stocks to buy according to short sellers. While we acknowledge the potential of NUVL as an investment, 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 NUVL and trading at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
