Biotech Hedge Funds and Insider Buying: Following the Smart Money
Biotech hedge funds report their holdings every quarter in 13F filings, and company insiders report their trades within two business days on Form 4. Both show where people with deep knowledge are putting money. In our data, large insider buys and specialist fund ownership have come with better odds, but neither is a guarantee.
How to read biotech hedge fund holdings (13F)
Investment managers with more than $100 million in US stocks file a 13F with the SEC after each quarter. It lists the stocks they owned at quarter-end. Funds have 45 days to file, so the data is always somewhat old by the time you see it.
A few things are worth knowing. A 13F only shows long positions, not short bets. It shows what a fund held, not what it did yesterday. And one fund holding a stock tells you less than several specialist biotech funds all adding at the same time.
That last pattern is the one we watch. Kodiak Sciences in July 2025 had six funds holding, three of them biotech specialists, and the stock was 40% below its high. Six months later it was up 287%.
Insider buying: which buys matter
Insiders are officers, directors and owners of more than 10% of the stock. When they buy or sell, they file a Form 4 within two business days, so this data is much fresher than a 13F.
Insiders sell for many reasons: taxes, a house, a planned sale. They buy for basically one: they think the stock is cheap. That is why buys get more attention.
Size matters. In our test of 2025 and early 2026, biotechs where insiders had bought $500,000 or more in the previous six months rose 50% or more within six months 26% of the time, against 21% for all biotechs. A cluster of small buys with no real money behind them was no better than average.
Two real examples
Corcept (CORT). After an FDA rejection cut the stock in half, a director bought 100,000 shares for about $3.3 million in March 2026, near $33. It was that director's first open-market buy since 2021. By August the stock had closed at $123.57.
Arcus Biosciences (RCUS). In February 2025 Gilead, which already owned more than 10% of Arcus, bought another $15 million of stock at $11. The stock still fell to $6.87 two months later, 38% below Gilead's price, before rising to $26.10 by November. A smart buyer can be early.
Where following the smart money goes wrong
- 13F data is late. By the time you see it, the fund may have sold.
- Funds can be wrong together. A crowded stock can fall hard when several funds sell at once.
- Some insider buys are routine. Directors sometimes buy a token amount for appearances.
- Context matters. An insider buy right before a known catalyst is a different signal from one months away from any news.
See it live: See every biotech insider buy, filter for the big ones, then check which funds own the stock.
Open Inside Trades →Watch the video walkthrough
Prefer YouTube? Watch it there.
Frequently asked questions
Often, but not always. In our test, biotechs with $500,000 or more of insider buying in the past six months rose 50% or more within six months 26% of the time, against 21% for all biotechs. Small buys showed no edge.
Once a quarter. Managers have up to 45 days after each quarter ends to file, so the holdings you see describe the last day of the quarter, which can already be six weeks in the past when they are published.
Several well-known funds focus mainly on biotech and healthcare, including Baker Bros, RA Capital, RTW, Perceptive and OrbiMed. Our hedge fund pages list every biotech fund and its largest positions.
Within two business days, on SEC Form 4. That makes insider data one of the freshest public signals about a company.
No. A 13F lists long stock positions and some options, but not short sales. A fund could be short a stock and that would not appear.
Educational content only. Not financial advice. Past results don't predict future ones.