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The biotech industry is considered a growth industry with a very unique set of risks, mainly concerning the ability for research to turn into commercial success. For ideas on how to analyze stocks in the industry, we ran a screen.

We screened the biotech industry for stocks seeing high amounts of net institutional purchases over the current quarter, indicating institutional investors such as hedge fund managers expect these names to outperform.

Interactive Chart: Press Play to compare changes in market cap over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Do you think these names are poised to outperform? Use this list as a starting point for your own analysis.

1. Achillion Pharmaceuticals, Inc. (ACHN): Engages in the discovery, development, and commercialization of treatments for infectious diseases. Net institutional purchases in the current quarter at 2.4M shares, which represents about 4.93% of the company's float of 48.71M shares.

2. Amylin Pharmaceuticals, Inc. (AMLN): Engages in the discovery, development, and commercialization of drug candidates for the treatment of diabetes, obesity, and other diseases. Net institutional purchases in the current quarter at 7.3M shares, which represents about 5.47% of the company's float of 133.38M shares.

3. Ariad Pharmaceuticals Inc. (ARIA): Focuses on the discovery, development, and commercialization of small-molecule drugs for the treatment of cancer. Net institutional purchases in the current quarter at 26.7M shares, which represents about 17.43% of the company's float of 153.21M shares.

4. AVEO Pharmaceuticals, Inc. (AVEO): Engages in the discovery and development of cancer therapeutics. Net institutional purchases in the current quarter at 2.4M shares, which represents about 6.93% of the company's float of 34.65M shares.

5. Cell Therapeutics, Inc. (CTIC): Engages in the development, acquisition, and commercialization of drugs for the treatment of cancer. Net institutional purchases in the current quarter at 18.7M shares, which represents about 10.81% of the company's float of 173.00M shares.

6. Exact Sciences Corporation (EXAS): Focuses on developing a molecular diagnostic screening technology for the early detection and prevention of colorectal pre-cancer and cancer. Net institutional purchases in the current quarter at 5.2M shares, which represents about 9.95% of the company's float of 52.24M shares.

7. Exelixis, Inc. (EXEL): Engages in the discovery, development, and commercialization of small molecule drugs for the treatment of cancer, metabolic, and cardiovascular disorders. Net institutional purchases in the current quarter at 5.9M shares, which represents about 4.02% of the company's float of 146.67M shares.

8. Halozyme Therapeutics, Inc. (HALO): Engages in the development and commercialization of recombinant human enzymes that transiently modify tissue under the skin to facilitate injection of other therapies or correct diseased tissue structures for clinical benefits. Net institutional purchases in the current quarter at 20.0M shares, which represents about 30.36% of the company's float of 65.87M shares.

9. Idenix Pharmaceuticals Inc. (IDIX): Engages in the discovery and development of drugs for the treatment of human viral and other infectious diseases in the United States and Europe. Net institutional purchases in the current quarter at 13.0M shares, which represents about 19.7% of the company's float of 65.99M shares.

10. Lexicon Pharmaceuticals, Inc. (LXRX): Focuses on the discovery and development of drug candidates for the treatment of various human diseases. Net institutional purchases in the current quarter at 138.4M shares, which represents about 69.81% of the company's float of 198.25M shares.

11. Momenta Pharmaceuticals Inc. (MNTA): A biotechnology company, specializes in the in the characterization and process engineering of complex molecules. Net institutional purchases in the current quarter at 3.0M shares, which represents about 7.62% of the company's float of 39.39M shares.

12. Nektar Therapeutics (NKTR): Engages in developing a pipeline of drug candidates that utilize its PEGylation and polymer conjugate technology platforms. Net institutional purchases in the current quarter at 5.8M shares, which represents about 6.1% of the company's float of 95.12M shares.

13. Onyx Pharmaceuticals Inc. (ONXX): Engages in developing therapies targeting the molecular mechanisms causing cancer in the United States and internationally. Net institutional purchases in the current quarter at 3.6M shares, which represents about 5.99% of the company's float of 60.10M shares.

14. Optimer Pharmaceuticals, Inc. (OPTR): Focuses on discovering, developing, and commercializing hospital specialty products worldwide. Net institutional purchases in the current quarter at 7.1M shares, which represents about 16.72% of the company's float of 42.46M shares.

15. PDL BioPharma, Inc. (PDLI): Engages in the management of antibody humanization patents and royalty assets, which consist of Queen et al. Net institutional purchases in the current quarter at 9.7M shares, which represents about 8.05% of the company's float of 120.43M shares.

16. Questcor Pharmaceuticals, Inc. (QCOR): Provides prescription drugs for central nervous system and inflammatory disorders. Net institutional purchases in the current quarter at 2.4M shares, which represents about 4.06% of the company's float of 59.18M shares.

17. Regeneron Pharmaceuticals, Inc. (REGN): Develops, and commercializes pharmaceutical products for the treatment of serious medical conditions in the United States. Net institutional purchases in the current quarter at 2.9M shares, which represents about 4.06% of the company's float of 71.40M shares.

18. Santarus, Inc. (SNTS): Engages in acquiring, developing, and commercializing proprietary products that address the needs of patients treated by physician specialists. Net institutional purchases in the current quarter at 2.7M shares, which represents about 6.04% of the company's float of 44.72M shares.

19. Spectrum Pharmaceuticals, Inc. (SPPI): Primarily focuses on oncology and hematology. Net institutional purchases in the current quarter at 8.7M shares, which represents about 17% of the company's float of 51.19M shares.

20. VIVUS Inc. (VVUS): Engages in the development and commercialization of therapeutic products for underserved markets in the United States. Net institutional purchases in the current quarter at 2.6M shares, which represents about 4.38% of the company's float of 59.31M shares.

*Institutional data sourced from Fidelity, all other data sourced from Finviz.

Source: 20 Biotech Stocks Being Bought Up By Hedge Funds