RBC says biotech sector's rebound has momentum, with intriguing opportunities for 2026

Apogee Enterprises

17/12/2025 11:45

** Brokerage RBC Capital Markets says biotech sector has strongly rebounded since April 2025, helped by good clinical data and successful new drug launches, creating more profitable, mature mid-cap names

** Brokerage says M&A is booming (about $101B in 2025, over double compared with 2024), and big pharma still needs to buy growth, so deal activity should stay strong into early 2026

** Believes the funding environment has improved: secondary offerings and private financing are up, and 2025 IPOs have performed well, suggesting the IPO window should reopen in 2026

** Policy and pricing fears (IRA, MFN, tariffs, inflation) are proving less damaging than initially feared, though regulatory volatility will continue, says brokerage

** RBC says after the big rally, valuations are less cheap and many hot areas are crowded, so investors must be more selective

** Brokerage sees Kymera Therapeutics KYMR.O, Apogee Therapeutics APOG.O, Xenon Pharmaceuticals XENE.O and Ascendis Pharma A71.F as potential takeout targets

 (Reporting by Padmanabhan Ananthan)

 ((Padmanabhan.Ananthan@thomsonreuters.com))