In 2020–2021, a very large number of biotech companies went public (IPOs). But this momentum faded in 2022, when the share prices of newly listed companies collapsed amid a broader sector downturn. Investors lost interest in the space and, until recently, it remained in the shadow of the AI and crypto boom.
Lately, however, the sector has attracted investors again, partly thanks to strong clinical-trial results and breakthroughs in gene therapy and rare diseases. The industry has also seen a noticeable pickup in mergers and acquisitions (M&A). Several large pharmaceutical companies announced biotech acquisitions in 2025—for example, Eli Lilly said it would acquire Verve Therapeutics, Merck KGaA announced the purchase of SpringWorks Therapeutics, Roche of 89bio, and Novartis of Avidity Biosciences.
We believe the sector may be attractive now for small, long-term allocations. You don’t have to invest through a single stock; you can gain exposure to the sector as a whole via an ETF (exchange-traded fund), for example, the iShares Biotechnology ETF (IBB US, a fund of biotech companies listed on U.S. stock exchanges).
Legend Biotech (LEGN US) is a biotechnology company developing cell therapies. Carvykti is the company’s flagship CAR-T product targeting BCMA (B-cell maturation antigen) for multiple myeloma. The therapy works by modifying a patient’s own white blood cells to recognize and attack cancer cells. Expanding Carvykti into earlier lines of therapy could support strong revenue growth. Legend Biotech is partnering with Johnson & Johnson on the development and commercialization of Carvykti.
Gilead Sciences (GILD US) is a large biopharmaceutical company developing small-molecule and biologic drugs; a leader in therapies for HIV/AIDS. Gilead also markets treatments for hematologic diseases, liver diseases, oncology, and the Yescarta CAR-T cell therapy for cancer. It operates in more than 35 countries, but the majority of revenue comes from the United States.
Jazz Pharmaceuticals (JAZZ US) is a pharmaceutical company with a broad set of niche products in neurology and hematology/oncology, but primarily focused on sodium oxybate products and narcolepsy. Jazz is headquartered in Dublin, Ireland. Recently, Jazz received approval for Modeyso (dordaviprone) to treat a rare brain tumor.
BioMarin Pharmaceuticals (BMRN US) is a global biotechnology company that develops and sells treatments for rare genetic diseases. Vimizim treats mucopolysaccharidosis (MPS) type VI, a metabolic enzyme deficiency. Voxzogo is used for achondroplasia. Naglazyme is for patients with MPS VI, a debilitating and life-threatening genetic disorder. Palynziq is approved and marketed in the U.S. for adults with phenylketonuria. The headquarters is in California. Manufacturing is in the U.S. and Ireland, with sales worldwide.
Neurocrine Biosciences (NBIX US) specializes in therapies for neurological, neuropsychiatric, and endocrine disorders. The company works on treatments for anxiety, depression, Alzheimer’s disease, insomnia, stroke, brain tumors, multiple sclerosis, and more. Key products are Ingrezza for movement disorders (such as tardive dyskinesia) and Crinecerfont (in development) for congenital adrenal hyperplasia (CAH). A promising program is osavampator for major depressive disorder (MDD).
United Therapeutics (UTHR US) develops pharmaceuticals for vascular diseases such as pulmonary hypertension and peripheral vascular disorders. The bulk of revenue is generated by Tyvaso (an inhaled therapy for pulmonary hypertension). A potential growth area is the treatment of idiopathic pulmonary fibrosis (IPF), though this is unlikely before mid-2027.
There are many participants in the biotech sector, and the list above covers only a few of them.
Biotech companies operate in a field with very high potential but also significant risks. Typical industry risks can be grouped into several categories.
1. R&D (scientific/technical) risks Every new drug or therapy goes through a long and costly path—from lab research to human trials. At any stage the project may be stopped due to insufficient efficacy or safety issues. Delays at certain steps can also increase costs or reduce potential gains. 2. Regulatory risks Any new drug must be approved by regulators (e.g., the FDA in the U.S. or the EMA in Europe). A regulator may request additional data, require more studies, or refuse approval; standards may change and safety criteria may be tightened. Rules differ by country, so entering new markets requires adapting to local requirements. Inspections and investigations by regulators are common in biotech and pharma. 3. Commercial risks Even after approval, commercial success isn’t guaranteed. Competitors (including cheaper alternatives) may enter the market. Insurers or public programs may not fully reimburse treatment with the drug, which can constrain sales. 4. Manufacturing risks Biologic manufacturing is complex. Advanced products require precise parameters, and production lines are expensive. Disruptions can halt output; defects or contamination can lead to recalls, fines, and reputational damage. 5. Financial risks Drug development requires huge investment, while revenues appear only years later. If trials drag on or investors lose interest, a company may face a cash shortfall.