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In this article we present the list of top 10 biotech stocks hedge funds are most bullish about. The list is based on the 13F filings of more than 350 hedge funds and a few mutual funds with stellar reputation. Insider Monkey follows hedge fund managers because they're the smartest investors around. They leave less to chance than do most investors. They go to great lengths to get an “edge” over ordinary investors. Hedge fund managers also have the resources to do extensive research on public companies and they have access to experts who can guide them. We believe we are more likely to beat the market by imitating insiders and hedge funds than trading against them.

Here are the top 10 biotech stocks that hedge funds are buying like crazy:

1. Gilead Sciences (NASDAQ:GILD): More hedge funds - in fact, 35 – owned Gilead at the end of September than any other biotech stock. Gilead fared pretty well over the year 2011, returning 10%, beating the S&P's 1% return. Phill Gross and Robert Atchinson’s Adage Capital Management has nearly 4 million shares, decreased by 17% during Q3.

2. Biogen Idec (NASDAQ:BIIB): Biogen takes the second place here. The stock most certainly made a few hedge fund managers happy. It was owned by 34 hedge funds in Q3, and the company did not disappoint. BIIB returned a whopping 65% over the year. Andreas Halvorsen's Viking Capital has the largest position among the more than 350 hedge funds we follow. It's a position that Viking initiated during the second quarter. The firm boosted its position by 82% during Q3 and had 2.53 million shares as of the end of September.

3. Life Technologies (NASDAQ:LIFE): Life Technologies was owned by 32 hedge funds at the end of September. But the stock is the biggest loser in this list, dropping nearly 30% so far in 2011. Larry Robbins' Glenview Capital had the most shares among the hedge funds we track. The firm increased its position by 11% last quarter.

4. Medtronic (NYSE:MDT): Medtronic was in 31 hedge funds' portfolios last quarter. The company lost 4% year to date. Most of the funds that have the larger positions in MDT decreased their interest last quarter. But Ken Fisher's Fisher Asset Management increased its position by 2%, giving them a total of 8.76 shares.

5. Amgen (NASDAQ:AMGN): Amgen was in 28 hedge funds' portfolios in Q2. The company managed to beat the S&P, returning 15% so far this year. Jim Simons’ Renaissance Technologies decreased its position in AMGN last quarter by 39% to 1.46 million shares.

6. St. Jude Medical (NYSE:STJ): St. Jude has lost about 18% year to date, and the 22 hedge funds that invested in the stock may not be happy about this. Andreas Halvorsen’s Viking Global was STJ’s largest hedge fund stakeholder last quarter. The firm had 3.67 million shares in the stock, after it increased its position by 13% (see Andreas Halvorsen’s favorite stocks).

7. Medicis Pharmaceutical (MRX): Medicis was owned by 21 hedge funds in Q3. The company beat the S&P, returning 23% year to date. Michael A. Price and Amos Meron’s Empyrean Capital Partners reported more than 11 million shares in the stock at the end of September. That number was unchanged during Q3.

8. Charles River Pharmaceutical (NYSE:CRL): CRL went in the negative during the third quarter, and it lost 25% year to date. The stock was in 19 hedge funds' portfolios last quarter. Andreas Halvorsen’s Viking Global is one of the top holders of this stock. The firm increased its position by 42% last quarter, and had about 1.73 million shares of CRL at the end of September.

9. NPS Pharmaceuticals (NASDAQ:NPSP): NPSP disappointed over the past quarter, coming in lower than the S&P 500 index. NPSP had a loss of 20% so far this year, compared to the S&P's return of 1%. The company was in 19 hedge funds' portfolios over the past quarter. Samuel Isaly’s OrbiMed Advisors had 3.18 million shares of NPSP at the end of September. That number was after the firm decreased its position by 20%.

10. PerkinElmer (NYSE:PKI): PerkinElmer was also in 19 hedge funds' portfolios in the third quarter, but it was another disappointment. PKI lost more than 19% so far in 2011. Robert Joseph Caruso’s Select Equity Group slightly decreased its position by 2% during Q3, giving the firm a totally 4.78 million shares. Chuck Royce also had nearly 4.6 million shares in the stock as of the end of September (see Chuck Royce’s stock picks).

Source: Top 10 Biotech Stocks Loved By Hedge Funds