Best Biotech Stocks to Buy for January 2026
5 Top Biotech Stocks to Buy Today
| Company (Ticker) | 12 Week Price Change | Forward PE | Price | Proj EPS Growth (1 Year) | Projected Sales Growth (1Y) |
|---|---|---|---|---|---|
| Keros Therapeutics (KROS) | 26.46% | NA | $19.46 | -249.05% | -95.31% |
| Veracyte (VCYT) | 22.28% | 26.98 | $43.80 | -3.31% | 10.96% |
| Catalyst Pharmaceuticals (CPRX) | 14.85% | 9.46 | $24.45 | 3.66% | 8.32% |
| Biohaven Ltd. (BHVN) | -28.93% | NA | $13.76 | 55.67% | 425.47% |
| Anavex Life Sciences (AVXL) | -33.92% | NA | $5.30 | 14.81% | NA |
*Updated on January 22, 2026.
Keros Therapeutics (KROS)
$19.46 USD +0.44 (2.31%)
3-Year Stock Price Performance
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- Zacks Rank
Strong Buy 1
- Style Scores
B Value A Growth D Momentum B VGM
- Market Cap:$579.47 M (Small Cap)
- Projected EPS Growth: 145.00%
- Last Quarter EPS Growth:76.32%
- Last EPS Surprise:83.78%
- Next EPS Report date:Feb. 25, 2026
Our Take:
Keros Therapeutics is a clinical-stage biotech developing TGF-β pathway modulators, led by elritercept for anemia in MDS and myelofibrosis and KER-065 for muscle disorders.
The latest quarter reflected a cleaner story: Takeda’s global license for elritercept and related revenues sharply reduced operating burn, while the board advanced a $375 million capital-return plan and completed a tender offer, signaling confidence in the balance sheet and pipeline focus on KER-065. These moves de-risk execution on the lead asset and extend the runway. Key risks remain around timelines and regulatory interactions.
A Zacks Rank #1 (Strong Buy) aligns with positive estimate revisions. The Style Scores of B for Value and A for Growth suggest improving fundamentals despite a weak Momentum Score of D. On the Price, Consensus & EPS Surprise chart, EPS lines for 2026–2027 trend higher while the stock remains volatile after sharp gaps, creating room for multiple catch-ups.
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Veracyte (VCYT)
$43.80 USD +0.50 (1.15%)
3-Year Stock Price Performance
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- Zacks Rank
- Strong Buy 1
- Style Scores
D Value A Growth B Momentum B VGM
- Market Cap:$3.42 B (Mid Cap)
- Projected EPS Growth:39.50%
- Last Quarter EPS Growth:22.58%
- Last EPS Surprise:59.38%
- Next EPS Report date:Feb. 23, 2026
Our Take:
Veracyte is a diagnostics-focused biotech that commercializes genomic tests, such as Afirma, Decipher and Prosigna, to inform cancer care. It provides clinicians with high-value insights.
Third-quarter results showed healthy testing revenue growth and margin expansion, prompting an increase in full-year guidance. The business model benefits from recurring testing volumes and payer coverage, though reimbursement changes remain a key watch item. New launches of TrueMRD and Prosigna LDT are expected to expand its portfolio of advanced genomic tests and support its long-term growth.
A Zacks Rank #1 and Style Score of A for Growth reflect upward revisions and improving earnings quality, while D for Value and B for Momentum indicate a premium multiple on accelerating fundamentals, with firming momentum as estimates rise. On the chart, the stock’s multi-year uptrend broadly tracks rising 2026–2027 EPS lines, with brief pauses when estimates consolidate.
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Catalyst Pharmaceuticals (CPRX)
$24.45 USD +0.32 (1.33%)
3-Year Stock Price Performance
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- Zacks Rank
- Buy 2
- Style Scores
A Value C Growth F Momentum B VGM
- Market Cap:$2.97 B (Mid Cap)
- Projected EPS Growth:11.31%
- Last Quarter EPS Growth:3.23%
- Last EPS Surprise:33.33%
- Next EPS Report date:Feb. 25, 2026
Our Take:
Catalyst is a commercial-stage biotech focused on neuromuscular and rare diseases, anchored by Firdapse for LEMS and Agamree for DMD. The company runs a commercial model with expanding patient access, complemented by disciplined business development.
The latest quarter delivered solid double-digit revenue growth, driven by continued Firdapse adoption and early Agamree contribution, with management raising full-year guidance. Strong cash flow and no debt provide flexibility for life-cycle management and business development. It also creates optionality for acquisitions, trials and share repurchases ahead. Key sensitivities include competitive dynamics in LEMS and DMD launch execution.
A Zacks Rank #2 (Buy) with Style Scores of A for Value, C for Growth and F for Momentum highlights attractive valuation versus improving estimates despite weak momentum. On the chart, EPS lines inflect higher into 2026–2027 while the share price chops in a range, suggesting potential re-rating if guidance continues to firm.
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Biohaven Ltd. (BHVN)
$13.76 USD +0.89 (6.92%)
3-Year Stock Price Performance
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- Zacks Rank
- Buy 2
- Style Scores
F Value C Growth D Momentum F VGM
- Market Cap:$1.36 B (Small Cap)
- Projected EPS Growth:25.75%
- Last Quarter EPS Growth:15.46%
- Last EPS Surprise:14.14%
- Next EPS Report date:March 2, 2026
Our Take:
Biohaven is a clinical-stage biotech advancing a neuroscience and immunology pipeline anchored by Kv7 channel activators and small-molecule IgG degraders.
Third-quarter updates emphasized portfolio breadth and steady clinical execution, with additional progress highlighted at subsequent investor events. While program readouts can introduce volatility, the company’s diversified mechanisms, from small-molecule degraders to channel modulators, support multiple shots on goal across neurology and autoimmune settings. Portfolio rebalancing and cost optimization efforts are expected to position the company for long-term growth. Data from its Phase 2 obesity proof-of-concept trial is expected this year.
A Zacks Rank #2, along with Style Scores of C for Growth, D for Momentum and F for Value, frames an expensive, pipeline-driven setup where estimate revisions are stabilizing. On the chart, the stock’s longer base has given way to an uptrend as 2026–2027 estimate lines rise, though swings around trial headlines remain meaningful.
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Anavex Life Sciences (AVXL)
$5.30 USD 0.00 (0.00%)
3-Year Stock Price Performance
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- Zacks Rank
- Buy 2
- Style Scores
D Value B Growth F Momentum D VGM
- Market Cap:$473.55 M (Small Cap)
- Projected EPS Growth:14.81%
- Last Quarter EPS Growth:15.46%
- Last EPS Surprise:15.38%
- Next EPS Report date:Feb. 11, 2026
Our Take:
Anavex Life Sciences is a clinical-stage biotech developing sigma-1 receptor modulators, led by blarcamesine for early Alzheimer’s and other CNS disorders.
In the latest quarter, the company posted a narrower loss and ended fiscal 2025 with about $103 million in cash, supporting near-term milestones. It will seek CHMP re-examination after a negative trend vote and plans an FDA meeting on trial results, setting defined regulatory catalysts. It is participating as a key industry partner in ACCESS-AD in Europe.
A Zacks Rank #2 signals improving estimates. A Style Score of B for Growth points to operating leverage as spending normalizes, while D for Value and F for Momentum reflect a speculative profile and choppy trading. On the chart, 2026–2027 estimates edge up while the share price trends sideways with sharp swings around headlines. Regulatory resolution could close the gap between steadier estimates and lagging prices.
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Methodology
The Zacks Rank is a proprietary stock-rating model that uses trends in earnings estimate revisions and earnings-per-share (EPS) surprises to classify stocks into five groups: #1 (Strong Buy), #2 (Buy), #3 (Hold), #4 (Sell) and #5 (Strong Sell). The Zacks Rank is calculated through four primary factors related to earnings estimates: analysts' consensus on earnings estimate revisions, the magnitude of revision change, the upside potential and estimate surprise (or the degree in which earnings per share deviated from the previous quarter).
Zacks builds the data from 3,000 analysts at over 150 different brokerage firms. The average yearly gain for Zacks Rank #1 (Strong Buy) stocks is +23.62% per year from January, 1988, through June 2, 2025.
Selections for Best Biotech Stocks are based on the current top ranking stocks based on Zacks Indicator Score, Style Scores and fundamentals. For this list, only companies that have average daily trading volumes of 100,000 shares or more of 135 biotech companies listed on the New York Stock Exchange or Nasdaq. All information is current as of market open, Jan. 22, 2026.
General Biotech Investment Questions
What Are Biotech Stocks?
Biotech stocks are shares of companies that use biological systems and organisms to develop new drugs, therapies, and diagnostics. These firms invest heavily in research & development and often carry greater risk than traditional pharmaceutical companies.
Types of Biotech Stocks
- Platform biotechs: Focus on enabling technologies (e.g., mRNA, gene editing, synthetic biology).
- Therapeutic biotechs: Develop specific drug candidates (e.g., rare disease, oncology).
- Service biotechs: Provide research tools, reagents, or contract research services.
What Are the Benefits of Buying Biotech Stocks?
- High upside: Successful trials or approvals can lead to big gains.
- Innovative exposure: Access to cutting-edge science (e.g., gene therapy).
- Diversification: Biotech can be a non-cyclical growth lever in a portfolio.
- Partnering potential: Smaller biotech firms are often acquired by larger pharma.
What Are the Risks of Buying Biotech Stocks?
- Clinical risk: Many drugs fail in trials
- Cash burn: R&D is expensive, and many biotechs depend on funding.
- Regulatory risk: FDA decisions can make or break a company.
- Volatility: Stock prices swing wildly on news.
Biotech Stocks vs. Biotech ETFs
- Stocks: Higher potential reward, but higher risk and volatility
- ETFs: Diversified exposure, smoother ride, less binary outcomes
Which is right depends on your risk tolerance and conviction in individual companies.
Why Are Biotech Stocks So Volatile?
- Clinical trial outcomes are binary (success/failure).
- Regulatory approvals depend on strict criteria.
- Biotechs often raise capital, diluting shareholders.
- News-driven: trial results, partnership deals, or FDA news can swing sentiment.
Is It Too Late to Invest in Biotech Stocks?
Not necessarily. While some biotechs (especially large-caps) may look fully valued, many smaller, clinical-stage companies still offer asymmetric upside. Plus, emerging trends — gene editing, synthetic biology, AI-driven drug discovery — continue to open new frontiers.
Best Biotech ETFs
Not all investors want to take on the risk of single biotechs. Below are some top ETFs that offer diversified exposure:
- iShares Biotechnology ETF (IBB): Focuses on large-cap biotech names, offering lower volatility compared to smaller biotechs.
- SPDR S&P Biotech ETF (XBI): Equal-weighted, which means more exposure to mid- and small-cap biotech companies — higher risk, potentially higher reward.
- VanEck Biotech ETF (BBH): Concentrated in major pure-play biotech names.
These ETFs help mitigate the binary risk inherent in individual biotech names by spreading exposure across many companies.
Biotech Stocks Trends and Forecast
What Biotech Stocks Could Benefit from New FDA Approvals?
- Sarepta (SRPT): Pipeline in DMD and other neuromuscular disorders.
- Beam (BEAM): Base-editing therapies could attract regulatory attention as clinical data matures.
- Arcellx: Its CAR-T programs (e.g., anito-cel) could hit registrational milestones soon.
Which Biotech Firms Are Leading in Gene Editing or mRNA?
- Beam Therapeutics: Base editing platform.
- CRISPR Therapeutics / Vertex: CRISPR-based therapies.
- Moderna: mRNA-based vaccines and therapies.
What Are the Most Promising Biotech Trends for 2025/2026?
- Base editing and next-gen CRISPR.
- Synthetic biology for therapeutics.
- Precision medicine for rare diseases.
- AI-driven drug discovery.
- Cell and gene therapies for “undruggable” conditions.
How Does Interest Rate Policy Affect Biotech Valuations?
Higher interest rates make future cash flows less valuable, which disproportionately affects pre-commercial biotech companies. Biotechs with strong cash reserves, recurring revenues, or partnerships may weather a high-rate environment better than early-stage names.
What Startups Could Be the Next Big Biotech Breakout?
Some emerging companies to watch include those in base editing (like Beam) or synthetic biology (like Twist Bioscience). Also, small gene therapy firms that prove safety and efficacy could be acquisition targets.
How to Select Biotech Stocks
How to Evaluate a Biotech Company’s Pipeline
- Examine clinical trial phases and data (Phase 1–3).
- Check regulatory designations (Orphan, Fast Track, Breakthrough).
- Assess manufacturing strategy (can they scale?)
- Review partnerships with big pharma.
What Financial Metrics Should I Look at When Selecting Biotech Stocks?
- Cash runway — Months until they need to raise capital.
- Burn rate — How fast they spend R&D cash?
- Debt levels — To help understand leverage risk.
- Revenue sources — If any (e.g., royalties, partnerships).
- Valuation multiples — P/E for commercial companies, or price-to-cash for R&D firms.
Which Biotech Companies Are Using AI for Drug Discovery?
Several biotech firms now leverage AI to speed up target identification, optimize molecules, and predict clinical success. While specific names vary, more platform-focused biotechs (especially in synthetic biology and precision medicine) are adopting AI broadly.
Advanced or Thematic Biotech Investing
Best Gene Therapy, Immunotherapy, or Synthetic Biology Stocks
- Gene Therapy: Beam (base editing), Sarepta (DMD)
- Immunotherapy/CAR-T: Arcellx (anito-cel).
- Synthetic Biology: Twist Bioscience (DNA synthesis).
Top AI-Driven Biotech Companies to Watch
Companies combining AI with biology to accelerate drug development are particularly exciting. Though many remain private, public players using AI in drug discovery or platform development may include synthetic biology firms and next-gen therapeutic companies.
Small-Cap vs. Large-Cap Biotech Investing Strategies
- Small-Cap: Higher risk/reward; ideal for speculative, event-driven plays.
- Large-Cap: More stability, some revenue streams, diversified pipelines.
- Balanced Approach: Use ETFs for broad exposure + pick 1–2 individual names for high conviction.
How FDA Approval Cycles Impact Biotech Valuations
Each clinical milestone (Phase 2 readout, Phase 3 initiation, NDA/BLA filing) can trigger major revaluations. Investors often build models around key FDA dates, trial data, and partner commitments. Failure or delay can lead to steep losses; success can lead to multi-bagger returns.
