Top 10 Small Cap Stocks to Buy with the Highest Upside Potential

3. Agios Pharmaceuticals, Inc. (NASDAQ:AGIO)

Analyst Upside: 62.57%

Market Cap: $1.97 billion 

Number of Hedge Fund Holders: 24

Agios Pharmaceuticals, Inc. (NASDAQ:AGIO) is a biopharmaceutical company that focuses on cellular metabolism and classical hematology. Based in Cambridge, Massachusetts, the company engages in investigational therapies in preclinical development.

The company recently received $1.1 billion in milestone payments after the FDA’s approval of vorasidenib, which originated at Agios Pharmaceuticals (NASDAQ:AGIO) and is an anti-cancer drug. These payments include a $905 million payment from Royalty Pharma in association with the vorasidenib royalty purchase agreement that Agios Pharmaceuticals (NASDAQ:AGIO) announced in May 2024. It also includes a $200 million payment from Servier in connection with Agios Pharmaceutical’s (NASDAQ:AGIO) divestiture of its oncology business in 2021.

Apart from these milestone payments, the company has cash, cash equivalents, and marketable securities of around $1.7 billion as of Q3 2024. The company expects to use this total balance, along with the anticipated interest income and product revenue, to prepare for the potential launch of its PYRUKYND therapy for thalassemia and sickle cell disease. PYRUKYND holds the potential to become the first therapy approved for all thalassemia subtypes. The company also has plans to use its financial independence to advance its existing programs and opportunistically expand its pipeline. It takes the third spot on our list.

Meridian Growth Fund stated the following regarding Agios Pharmaceuticals, Inc. (NASDAQ:AGIO) in its Q2 2024 investor letter:

“Agios Pharmaceuticals, Inc. (NASDAQ:AGIO) is a leader in cellular metabolism and pyruvate kinase activation pioneering therapies for rare diseases. The stock appreciated in the quarter after it announced positive Phase 3 testing results of mitapivat, a therapy for adults with non-transfusion dependent thalassemia, an anemia blood disorder. With these results, we expect an FDA filing for the drug in the back half of this year for approval. The company also sold its 15% royalty on a cancer drug, which provided a boost to its cash position that could be used to further develop and market mitapivat. We trimmed our position in the company based on our valuation discipline as the share price appreciated.”