10 Most Shorted Biotech Stocks to Buy According to Hedge Funds

Industry Overview - J.P. Morgan highlights trends defining healthcare in 2026, particularly in the biopharma segment, which is gaining momentum and attracting investor interest [1] - Mergers and acquisitions in the biopharma sector are increasing as companies seek to bolster their pipelines ahead of patent expirations for major drugs [1] - Investors are optimistic about smaller biopharma companies with promising drugs and clear value paths, alongside a convergence of biotech and digital health [2] Investment Opportunities - There is an expectation of more deals in 2026 and key clinical results on the horizon, presenting opportunities for informed investors [2] - A methodology was employed to identify U.S.-listed biotechnology companies with market capitalizations above $2 billion, a short interest ratio greater than 15%, and at least 15% upside potential [5][6] Hedge Fund Interest - The focus on stocks that hedge funds are investing in is based on research indicating that mimicking top hedge fund picks can lead to market outperformance [7] - The article lists the 10 most shorted biotech stocks to buy according to hedge funds, indicating strong interest and potential for growth [3] Company Spotlight: CRISPR Therapeutics AG - CRISPR Therapeutics AG is identified as one of the most shorted biotech stocks to buy, with significant attention from hedge funds [8] - Morgan Stanley raised its price target for CRISPR Therapeutics AG from $32 to $33 while maintaining an Underweight rating, reflecting updated estimates and pipeline evaluations [9] - Needham increased its price target for CRISPR Therapeutics AG from $80 to $82, maintaining a Buy rating with over 45% upside potential [10] - The company reported that its therapy Casgevy generated $116 million in sales in 2025, exceeding expectations and indicating strong commercial traction [11] - CRISPR Therapeutics AG focuses on gene editing to develop potentially curative medicines for serious diseases, positioning itself as a leader in genetic medicine [12]