We recently published our article 10 Cheap Biotech Stocks to Buy Now. In this article, we take a closer look at Halozyme Therapeutics Inc. (NASDAQ: HALO) and why the company has emerged as one of the cheap biotech stocks attracting renewed investor attention in the global biotech industry.

Seasoned market watchers often say that the biotech sector has a rhythm of its own. It rarely moves in a straight line, and when it finally does gather momentum, it tends to do so quickly and dramatically. In this article, we will take a closer look at the 10 Cheap Biotech Stocks to Buy Now, a group of companies that investors are increasingly watching as the biotechnology sector navigates one of its most intriguing periods in recent memory.

For those who have covered the healthcare and biotechnology industry long enough, the past year offered a reminder of just how cyclical biotech investing can be. Speaking on CNBC’s Closing Bell on February 27, Eli Casdin, founder and CEO of Casdin Capital, described the previous year as a banner period for biotech innovation and dealmaking. Yet despite the favorable macro environment, the sector has entered the new year with somewhat slower momentum. According to Casdin, this apparent disconnect between strong fundamentals and muted stock performance is not unusual for biotechnology stocks, which often experience bursts of activity following quieter stretches.

Casdin noted that biotech experienced a similar pattern the year before. The sector started slowly but eventually accelerated during the final quarter as investors rediscovered opportunities in undervalued biotech companies and pharmaceutical pipelines. In his view, the current market environment feels somewhat similar. Investors are still searching for the next breakthrough therapy or high-upside biotech stock, and many appear to be cautiously exploring opportunities rather than aggressively committing capital.

The $225 Billion Signal Beneath the Surface

One of the most revealing indicators of confidence within the biotechnology sector often comes not from the stock market itself but from mergers and acquisitions. Last year alone, biotech and pharmaceutical M&A activity reached approximately $225 billion, a figure that many analysts believe helped place a floor under biotech valuations.

For experienced biotech investors, this level of dealmaking often signals that large pharmaceutical companies are actively searching for innovation outside their own research laboratories. As major drugmakers face looming patent expirations, acquiring promising biotech pipelines becomes one of the fastest ways to replenish their portfolios.

Casdin pointed out that the industry is approaching a particularly significant milestone. By 2030, pharmaceutical companies are expected to face roughly $200 billion in annual revenue losses due to expiring patents. To offset that gap, the industry currently holds more than $1 trillion in deployable capital, creating a powerful incentive for large drugmakers to acquire smaller biotechnology companies with promising clinical programs.

This dynamic has historically served as one of the strongest tailwinds for cheap biotech stocks. When acquisition activity accelerates, smaller biotech firms with innovative therapies can quickly become takeover targets, sometimes delivering substantial returns to early investors.

Artificial Intelligence and the Future of Drug Discovery

Another major theme shaping investor sentiment around biotech stocks involves the growing role of artificial intelligence in drug discovery and development. Over the past two years, AI has rapidly transformed multiple industries, from finance and marketing to software development. Naturally, many investors have begun asking how artificial intelligence might reshape biotechnology.

Casdin offered an interesting perspective on this topic. While he acknowledged that AI can dramatically accelerate certain aspects of drug discovery—such as analyzing genetic data or identifying promising molecular targets—he emphasized that biotechnology remains fundamentally rooted in the physical sciences.

In other words, algorithms can assist researchers, but they cannot replace biology itself. As Casdin famously remarked during the interview, artificial intelligence might “eat software,” but it cannot simply download a molecule and turn it into a drug. Developing new therapies still requires biological experimentation, clinical trials, and extensive laboratory validation.

Rather than replacing biotech innovation, AI may instead serve as an accelerant for drug development, helping researchers identify promising compounds faster and streamline complex research processes. For investors, this could ultimately shorten development timelines and potentially increase the number of successful biotech breakthroughs.

Healthcare Stocks Regaining Investor Interest

The broader healthcare sector is also beginning to regain attention after a period of relative underperformance. In a recent appearance on CNBC’s The Exchange, Steven Wieting, Chief Investment Strategist for the CIO Group, discussed how healthcare stocks have quietly started outperforming several other sectors since the beginning of the year.

According to Wieting, defensive sectors such as healthcare, consumer staples, and utilities have shown resilience in the current market environment. These sectors tend to perform well during periods of economic uncertainty because demand for essential services like medicine and healthcare treatment remains relatively stable regardless of broader market cycles.

Wieting also pointed out that healthcare stocks had been weighed down in previous years by policy concerns and regulatory uncertainty. As those fears begin to fade, investors are gradually returning to the sector, recognizing that many healthcare companies—including biotech firms—are trading at valuations that appear historically attractive.

Another factor drawing investors toward healthcare stocks is their relatively low correlation with technology companies, which have dominated the stock market over the past decade. As the tech sector experiences periods of volatility, investors often seek diversification in industries that operate under different economic drivers.

Market Narratives, AI, and Investor Psychology

Wieting also addressed the evolving narrative surrounding artificial intelligence and its broader economic implications. While AI infrastructure spending has surged—particularly in areas like data centers and advanced computing hardware—investor sentiment around the long-term economic impact of AI has become more complex.

Some market participants worry that widespread automation could disrupt multiple industries, while others view AI as a powerful productivity tool capable of reducing business costs and unlocking new growth opportunities.

According to Wieting, markets often exaggerate both the risks and the rewards associated with emerging technologies. History shows that technological revolutions rarely unfold exactly as predicted, and investors frequently oscillate between optimism and skepticism before the true economic impact becomes clear.

Within this environment, sectors like biotechnology occupy a unique position. Unlike software applications that can be rapidly replicated or disrupted by new technologies, biotech companies rely on scientific breakthroughs rooted in biology and chemistry. Developing new medicines remains a complex process requiring years of research, clinical trials, and regulatory approvals.

Why Investors Are Searching for Cheap Biotech Stocks

For value-oriented investors, this environment has created a compelling opportunity. Many biotech stocks remain significantly below their historical valuation peaks, even as scientific innovation and pharmaceutical demand continue to advance.

Cheap biotech stocks, particularly those with promising drug pipelines or strong clinical data, often attract interest from hedge funds and institutional investors searching for asymmetric upside potential. In some cases, these companies trade at modest valuations despite possessing technologies or therapies that could dramatically reshape treatment landscapes.

With global healthcare spending continuing to rise and pharmaceutical companies actively searching for acquisition targets, the biotechnology sector may once again become a focal point for investors willing to look beyond short-term volatility.

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Our Methodology

To identify the best cheap biotech stocks to buy now, we sifted through the Finviz stock screener to find biotechnology companies trading with a forward price-to-earnings ratio below 15, a valuation threshold often associated with undervalued growth opportunities. From this list, we selected the 12 biotech stocks that are most widely held by elite hedge funds as of the third quarter of 2025, based on data sourced from Insider Monkey’s hedge fund database.

The companies featured in the following sections are ranked in ascending order according to hedge fund sentiment, offering insight into which biotech stocks sophisticated institutional investors appear to favor as the sector searches for its next wave of innovation and growth. All financial data used in this analysis was recorded as of February 28.

10 Cheap Biotech Stocks to Buy Now

4. TG Therapeutics Inc. (NASDAQ:TGTX)

TG Therapeutics, Inc. (NASDAQ: TGTX) ranks fourth among the best cheap biotech stocks to buy now following strong revenue growth driven by its flagship therapy BRIUMVI. The company focuses on developing treatments for autoimmune diseases and B-cell malignancies.

Financial results released on February 26 revealed total revenue of $192.6 million in the fourth quarter and $616.3 million for the full year of 2025. Much of that growth was fueled by BRIUMVI, which generated $182.7 million in U.S. revenue during the quarter and nearly $594 million for the full year.

BRIUMVI’s rapid adoption reflects growing physician confidence in the therapy’s effectiveness in treating multiple sclerosis. The company is also expanding internationally through its partnership with Neuraxpharm, which has helped secure regulatory approvals across multiple regions including the European Union, the United Kingdom, Switzerland, and Australia.

Management expects total global revenue to reach between $875 million and $900 million in 2026, signaling continued commercial momentum.

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Disclosure: No relevant interests to disclose. This article was originally published on BioTech HealthX.