We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
5 Biotech Stocks to Buy in 2025 Amid Uncertain Macroenvironment
Read MoreHide Full Article
The volatile biotech industry has braved the global trade war relatively well in the first half of 2025. While a pause in the tariff war between the United States and China has lent some stability, ongoing geopolitical tensions continue to be a headwind. Nonetheless, given the continuous need for innovative medical treatments (regardless of the state of the economy), the dynamic biotech industry will continue to capture investors’ interest despite the inherent volatility and uncertain macroeconomic environment.
Large pharma and biotech companies consistently seek to expand their product portfolios and pipelines through strategic collaborations and acquisitions to evolve their business models. Mergers and Acquisitions (M&A) have recently picked up a significant pace in this space after a relatively passive run in 2024, given the changing landscape and the spotlight on AI-driven drug discovery. Simultaneously, new drug approvals and rapid pipeline progress also maintain momentum amid a grim macro environment.
The Zacks Biomedical and Genetics industry comprises biopharmaceutical and biotechnology companies that develop high-profile drugs utilizing groundbreaking technology. These biologically processed drugs, which address virology, neuroscience, metabolism and rare diseases, are manufactured using live organisms.
As technology becomes increasingly paramount to improving global health, biotech companies aim to utilize innovative technology to develop breakthrough treatments rapidly. Several companies in this field are developing drugs and vaccines utilizing modern technology. Given the dynamic and evolving nature of technology, the sector seems riskier than the large-cap pharma or drug industry.
4 Trends Shaping the Future of the Biotech Industry
Innovation, Execution Hold the Key: The primary focus in the biotech industry is on the performance of high-profile drugs and innovative pipeline development, as only a handful of companies in this industry have approved drugs in their portfolios. Most companies spend millions and billions of dollars to create a drug with path-breaking technology, resulting in significant research and development expenditures. The recent spotlight on the usage of AI technology for drug discovery will propel further investment in this industry. Precision medicine, also known as personalized medicine, is another rapidly evolving field in the industry.
On the other hand, successful commercialization is crucial for higher drug uptake, as smaller biotechs often lack the necessary funds and expertise to reach the target population. This prompts collaboration deals with either pharma or biotech bigwigs, wherein sales are shared or royalties are received.
Sometimes, approved treatments come with side effects that emerge over time, and the uptake may fail to meet expectations. Hence, it takes several years before a biotech company turns profitable. Moreover, it may take quite a few years for any newly approved drug to contribute to its company’s top line.
M&A in the Spotlight: Consolidation has long been an area of focus in the pharma/biotech industry. This is because leading companies constantly look to diversify their revenue base in the face of dwindling sales of their high-profile drugs. The recent spree of acquisitions signifies a focus on portfolio expansion and constant pipeline innovation, given the changing landscape and spotlight on AI-driven drug discovery. Simultaneously, bigwigs in the space also enter into licensing deals and collaborations for a promising drug/candidate to strengthen and expand their portfolios in their respective core areas. While oncology and immuno-oncology companies have always been at the top of acquisition targets, the lucrative obesity sector and gene-editing space are also being eyed.
In April, pharma giant Johnson & Johnson acquired Intra-Cellular Therapies for approximately $14.6 billion and added antidepressant drug, Caplyta, to its neuroscience portfolio. Swiss pharma bigwig Novartis, too, has been on an acquisition spree. Novartis recently acquired clinical-stage biopharmaceutical company Regulus Therapeutics to strengthen its renal disease portfolio. Sanofi recently announced that it will acquire Blueprint Medicines for a total deal value of up to $9.5 billion to expand its portfolio in rare immunological diseases.
The recent spotlight on the usage of AI technology for drug discovery should lure investment in this industry.
New Drug Approvals Boost Prospects: New drug approvals are expected to accelerate in 2025, driven by a continued rise in R&D spending, as most companies aim to diversify their portfolios.
Pipeline Setbacks & Likely Tariffs Weigh on Outlook: Pipeline setbacks are key deterrents for biotech companies, given the exorbitant cost of developing drugs using expensive technology. Most drugs/therapies take years to gain a regulatory nod. An unfavorable outcome from a crucial trial on a promising candidate is a huge setback, particularly for smaller biotechs, which are mostly one-trick ponies. The leading biotechs face other headwinds, including declining sales of high-profile drugs due to intensifying competition.
Many big pharma/biotech companies have sizeable production units outside the country and imposition of tariffs will increase their costs, thereby shrinking margins.
Zacks Industry Rank Indicates Decent Prospects
The group’s Zacks Industry Rank is basically the average of the Zacks Rank of all the member stocks.
The Zacks Biomedical and Genetics industry currently carries a Zacks Industry Rank #86, which places it among the top 35% of more than 246 Zacks industries. The rank reflects a decent outlook for the space, driven by consistent demand for improved medical drugs and treatments despite the challenging macroenvironment. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few biotech stocks that are well-positioned to beat the industry based on a strong portfolio/pipeline, let’s take a look at the industry’s stock market performance and current valuation.
Industry Versus S&P 500 & Sector
The Zacks Biomedical and Genetics industry is a 700-stock group within the broader Zacks Medical sector. It has outperformed the Zacks Medical sector but underperformed the S&P 500 composite sector year to date.
The stocks in this industry have declined 2.6% year to date compared with the Zacks Medical sector’s loss of 2.8%. The S&P 500 composite has gained 5.5% in the said time frame.
YTD Price Performance
Industry's Current Valuation
Since most companies in the biotech sector do not have approved drugs, valuing these companies becomes a complex process. On the basis of the trailing 12-month price-to-sales ratio (P/S TTM), which is commonly used for valuing biotech companies with approved portfolios of drugs, the industry is currently trading at 1.96X compared with the S&P 500’s 5.6x and the Zacks Medical sector's 2.36x.
Over the past five years, the industry has traded as high as 4.20X, as low as 1.79X and at a median of 2.64X, as depicted in the chart below.
5 Biotech Stocks Worth Buying
Verona has delivered a stellar performance in the first half of 2025, driven by the increased uptake of its first approved drug, Ohtuvayre, as a maintenance treatment for chronic obstructive pulmonary disease (COPD) in adult patients. The drug’s differentiated profile provides a significant competitive edge. Regulatory filings in the EU and the UK are expected to be submitted soon. Verona is evaluating Ohtuvayre as a combo therapy for COPD and as a monotherapy for bronchiectasis, cystic fibrosis and asthma in separate mid-stage studies. Verona is expected to witness significant growth in the quarters ahead.
Verona currently sports a Zacks Rank #1 (Strong Buy). Verona’s shares have skyrocketed 94.8% year to date.
The Zacks Consensus Estimate for 2025 earnings per share (EPS) has increased 6 cents to 16 cents in the past 60 days. The consensus mark for 2026 EPS has remained unchanged at $2.88 in this timeframe.
Price and Consensus: VRNA
Alkermes’ top line is being driven by the sales of its proprietary drugs — Vivitrol, Aristada and Lybalvi — and this momentum is likely to continue further. The alcohol dependence indication continues to be an important growth driver for Vivitrol. The approval of new drugs will add an incremental revenue stream. Manufacturing and royalty revenues from net sales of products commercialized by its partners also boost sales. The separation of the oncology business in 2023 has enabled the company to focus on its individual businesses and drive long-term growth. The company resolved its dispute with Janssen, resulting in the reinstatement of future royalties.
Alkermes currently sports a Zacks Rank #1. The Zacks Consensus Estimate for 2025 EPS has increased 6 cents to $1.79 in the past 60 days. The consensus mark for 2026 EPS has risen 12 cents to $1.91 in this timeframe.
Price and Consensus: ALKS
Immunocore Holdings is a commercial-stage biotech company focused on developing a novel class of TCR bispecific immunotherapies, called ImmTAX, targeting a broad range of diseases, including cancer, autoimmune and infectious diseases. Kimmtrak, the sole-marketed drug in the company’s portfolio, is the first FDA-approved immunotherapy for metastatic uveal (ocular) melanoma, a rare form of cancer.
Several label expansion studies evaluating Kimmtrak, both as monotherapy and in combination with other therapies, are currently ongoing, targeting an earlier-line setting for melanoma indications. The company aims to reach more mUM patients with Kimmtrak worldwide in 2025 through additional launches and increased community penetration. With a strong cash position and some clinical milestones expected later this year, Immunocore is expected to maintain momentum.
Shares of this Zacks Rank #1 company have gained 11.4% year to date. Loss per share estimates for 2025 have narrowed 74 cents in the past 60 days to 70 cents.
Price and Consensus: IMCR
Exelixis’ lead drug, Cabometyx, continues to be the leading tyrosine kinase inhibitor for the treatment of renal cell carcinoma. The drug's use in combination with Opdivo in the first-line setting is driving demand. The recent label expansion of the drug for pancreatic neuroendocrine tumors is expected to boost its sales. The pipeline progress has been impressive as Exelixis looks to expand its oncology portfolio beyond Cabometyx. Positive data on zanzalintinib for colorectal cancer increases the chances of the candidate’s approval.
Shares of this biotech company have surged 31% year to date. The company currently carries a Zacks Rank #2 (Buy).
Price and Consensus: EXEL
The Zacks Consensus Estimate for 2025 earnings per share (EPS) has increased 33 cents to $2.64 in the past 60 days. The consensus mark for 2026 EPS has risen 28 cents to $3.13 in this timeframe.
Kiniska Pharmaceuticals is focused on discovering, acquiring, developing and commercializing novel therapies for diseases with unmet need, with a focus on cardiovascular indications. The company continues to drive strong growth with Arcalyst, which was licensed from Regeneron in 2017. The company received FDA approval for Arcalyst in March 2021 for treating recurrent pericarditis and reducing the risk of recurrence in adults and children 12 years and older. Demand continues to be strong, driven by increases to the prescriber base and longer average total duration of treatment. Pipeline candidate KPL-387 represents an additional treatment option for patients by enabling dosing with a single monthly subcutaneous injection in a liquid formulation.
The company carries a Zacks Rank of 2 at present. Its shares have risen 37.7%.
Price and Consensus: KNSA
The Zacks Consensus Estimate for 2025 EPS has increased 16 cents to 74 cents in the past 60 days. The consensus mark for 2026 EPS has also risen 16 cents to $1.19 in this timeframe.
Image: Bigstock
5 Biotech Stocks to Buy in 2025 Amid Uncertain Macroenvironment
The volatile biotech industry has braved the global trade war relatively well in the first half of 2025. While a pause in the tariff war between the United States and China has lent some stability, ongoing geopolitical tensions continue to be a headwind. Nonetheless, given the continuous need for innovative medical treatments (regardless of the state of the economy), the dynamic biotech industry will continue to capture investors’ interest despite the inherent volatility and uncertain macroeconomic environment.
Large pharma and biotech companies consistently seek to expand their product portfolios and pipelines through strategic collaborations and acquisitions to evolve their business models. Mergers and Acquisitions (M&A) have recently picked up a significant pace in this space after a relatively passive run in 2024, given the changing landscape and the spotlight on AI-driven drug discovery. Simultaneously, new drug approvals and rapid pipeline progress also maintain momentum amid a grim macro environment.
Biotech companies like Exelixis, Inc. (EXEL - Free Report) , Verona Pharma (VRNA - Free Report) , Alkermes (ALKS - Free Report) , Kiniska Pharmaceuticals (KNSA - Free Report) and Immunocore Holdings (IMCR - Free Report) are poised to outperform the sector in this volatile market environment.
Industry Description
The Zacks Biomedical and Genetics industry comprises biopharmaceutical and biotechnology companies that develop high-profile drugs utilizing groundbreaking technology. These biologically processed drugs, which address virology, neuroscience, metabolism and rare diseases, are manufactured using live organisms.
As technology becomes increasingly paramount to improving global health, biotech companies aim to utilize innovative technology to develop breakthrough treatments rapidly. Several companies in this field are developing drugs and vaccines utilizing modern technology. Given the dynamic and evolving nature of technology, the sector seems riskier than the large-cap pharma or drug industry.
4 Trends Shaping the Future of the Biotech Industry
Innovation, Execution Hold the Key: The primary focus in the biotech industry is on the performance of high-profile drugs and innovative pipeline development, as only a handful of companies in this industry have approved drugs in their portfolios. Most companies spend millions and billions of dollars to create a drug with path-breaking technology, resulting in significant research and development expenditures. The recent spotlight on the usage of AI technology for drug discovery will propel further investment in this industry. Precision medicine, also known as personalized medicine, is another rapidly evolving field in the industry.
On the other hand, successful commercialization is crucial for higher drug uptake, as smaller biotechs often lack the necessary funds and expertise to reach the target population. This prompts collaboration deals with either pharma or biotech bigwigs, wherein sales are shared or royalties are received.
Sometimes, approved treatments come with side effects that emerge over time, and the uptake may fail to meet expectations. Hence, it takes several years before a biotech company turns profitable. Moreover, it may take quite a few years for any newly approved drug to contribute to its company’s top line.
M&A in the Spotlight: Consolidation has long been an area of focus in the pharma/biotech industry. This is because leading companies constantly look to diversify their revenue base in the face of dwindling sales of their high-profile drugs. The recent spree of acquisitions signifies a focus on portfolio expansion and constant pipeline innovation, given the changing landscape and spotlight on AI-driven drug discovery. Simultaneously, bigwigs in the space also enter into licensing deals and collaborations for a promising drug/candidate to strengthen and expand their portfolios in their respective core areas. While oncology and immuno-oncology companies have always been at the top of acquisition targets, the lucrative obesity sector and gene-editing space are also being eyed.
In April, pharma giant Johnson & Johnson acquired Intra-Cellular Therapies for approximately $14.6 billion and added antidepressant drug, Caplyta, to its neuroscience portfolio. Swiss pharma bigwig Novartis, too, has been on an acquisition spree. Novartis recently acquired clinical-stage biopharmaceutical company Regulus Therapeutics to strengthen its renal disease portfolio. Sanofi recently announced that it will acquire Blueprint Medicines for a total deal value of up to $9.5 billion to expand its portfolio in rare immunological diseases.
The recent spotlight on the usage of AI technology for drug discovery should lure investment in this industry.
New Drug Approvals Boost Prospects: New drug approvals are expected to accelerate in 2025, driven by a continued rise in R&D spending, as most companies aim to diversify their portfolios.
Pipeline Setbacks & Likely Tariffs Weigh on Outlook: Pipeline setbacks are key deterrents for biotech companies, given the exorbitant cost of developing drugs using expensive technology. Most drugs/therapies take years to gain a regulatory nod. An unfavorable outcome from a crucial trial on a promising candidate is a huge setback, particularly for smaller biotechs, which are mostly one-trick ponies. The leading biotechs face other headwinds, including declining sales of high-profile drugs due to intensifying competition.
Many big pharma/biotech companies have sizeable production units outside the country and imposition of tariffs will increase their costs, thereby shrinking margins.
Zacks Industry Rank Indicates Decent Prospects
The group’s Zacks Industry Rank is basically the average of the Zacks Rank of all the member stocks.
The Zacks Biomedical and Genetics industry currently carries a Zacks Industry Rank #86, which places it among the top 35% of more than 246 Zacks industries. The rank reflects a decent outlook for the space, driven by consistent demand for improved medical drugs and treatments despite the challenging macroenvironment. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few biotech stocks that are well-positioned to beat the industry based on a strong portfolio/pipeline, let’s take a look at the industry’s stock market performance and current valuation.
Industry Versus S&P 500 & Sector
The Zacks Biomedical and Genetics industry is a 700-stock group within the broader Zacks Medical sector. It has outperformed the Zacks Medical sector but underperformed the S&P 500 composite sector year to date.
The stocks in this industry have declined 2.6% year to date compared with the Zacks Medical sector’s loss of 2.8%. The S&P 500 composite has gained 5.5% in the said time frame.
YTD Price Performance
Industry's Current Valuation
Since most companies in the biotech sector do not have approved drugs, valuing these companies becomes a complex process. On the basis of the trailing 12-month price-to-sales ratio (P/S TTM), which is commonly used for valuing biotech companies with approved portfolios of drugs, the industry is currently trading at 1.96X compared with the S&P 500’s 5.6x and the Zacks Medical sector's 2.36x.
Over the past five years, the industry has traded as high as 4.20X, as low as 1.79X and at a median of 2.64X, as depicted in the chart below.
5 Biotech Stocks Worth Buying
Verona has delivered a stellar performance in the first half of 2025, driven by the increased uptake of its first approved drug, Ohtuvayre, as a maintenance treatment for chronic obstructive pulmonary disease (COPD) in adult patients. The drug’s differentiated profile provides a significant competitive edge. Regulatory filings in the EU and the UK are expected to be submitted soon. Verona is evaluating Ohtuvayre as a combo therapy for COPD and as a monotherapy for bronchiectasis, cystic fibrosis and asthma in separate mid-stage studies. Verona is expected to witness significant growth in the quarters ahead.
Verona currently sports a Zacks Rank #1 (Strong Buy). Verona’s shares have skyrocketed 94.8% year to date.
The Zacks Consensus Estimate for 2025 earnings per share (EPS) has increased 6 cents to 16 cents in the past 60 days. The consensus mark for 2026 EPS has remained unchanged at $2.88 in this timeframe.
Price and Consensus: VRNA
Alkermes’ top line is being driven by the sales of its proprietary drugs — Vivitrol, Aristada and Lybalvi — and this momentum is likely to continue further. The alcohol dependence indication continues to be an important growth driver for Vivitrol. The approval of new drugs will add an incremental revenue stream. Manufacturing and royalty revenues from net sales of products commercialized by its partners also boost sales. The separation of the oncology business in 2023 has enabled the company to focus on its individual businesses and drive long-term growth. The company resolved its dispute with Janssen, resulting in the reinstatement of future royalties.
Alkermes currently sports a Zacks Rank #1. The Zacks Consensus Estimate for 2025 EPS has increased 6 cents to $1.79 in the past 60 days. The consensus mark for 2026 EPS has risen 12 cents to $1.91 in this timeframe.
Price and Consensus: ALKS
Immunocore Holdings is a commercial-stage biotech company focused on developing a novel class of TCR bispecific immunotherapies, called ImmTAX, targeting a broad range of diseases, including cancer, autoimmune and infectious diseases. Kimmtrak, the sole-marketed drug in the company’s portfolio, is the first FDA-approved immunotherapy for metastatic uveal (ocular) melanoma, a rare form of cancer.
Several label expansion studies evaluating Kimmtrak, both as monotherapy and in combination with other therapies, are currently ongoing, targeting an earlier-line setting for melanoma indications. The company aims to reach more mUM patients with Kimmtrak worldwide in 2025 through additional launches and increased community penetration. With a strong cash position and some clinical milestones expected later this year, Immunocore is expected to maintain momentum.
Shares of this Zacks Rank #1 company have gained 11.4% year to date. Loss per share estimates for 2025 have narrowed 74 cents in the past 60 days to 70 cents.
Price and Consensus: IMCR
Exelixis’ lead drug, Cabometyx, continues to be the leading tyrosine kinase inhibitor for the treatment of renal cell carcinoma. The drug's use in combination with Opdivo in the first-line setting is driving demand. The recent label expansion of the drug for pancreatic neuroendocrine tumors is expected to boost its sales. The pipeline progress has been impressive as Exelixis looks to expand its oncology portfolio beyond Cabometyx. Positive data on zanzalintinib for colorectal cancer increases the chances of the candidate’s approval.
Shares of this biotech company have surged 31% year to date. The company currently carries a Zacks Rank #2 (Buy).
Price and Consensus: EXEL
The Zacks Consensus Estimate for 2025 earnings per share (EPS) has increased 33 cents to $2.64 in the past 60 days. The consensus mark for 2026 EPS has risen 28 cents to $3.13 in this timeframe.
Kiniska Pharmaceuticals is focused on discovering, acquiring, developing and commercializing novel therapies for diseases with unmet need, with a focus on cardiovascular indications. The company continues to drive strong growth with Arcalyst, which was licensed from Regeneron in 2017. The company received FDA approval for Arcalyst in March 2021 for treating recurrent pericarditis and reducing the risk of recurrence in adults and children 12 years and older. Demand continues to be strong, driven by increases to the prescriber base and longer average total duration of treatment. Pipeline candidate KPL-387 represents an additional treatment option for patients by enabling dosing with a single monthly subcutaneous injection in a liquid formulation.
The company carries a Zacks Rank of 2 at present. Its shares have risen 37.7%.
Price and Consensus: KNSA
The Zacks Consensus Estimate for 2025 EPS has increased 16 cents to 74 cents in the past 60 days. The consensus mark for 2026 EPS has also risen 16 cents to $1.19 in this timeframe.
You can see the complete list of today’s Zacks #1 Rank stocks here.