Biotech stocks are surging. How investors can play the new drug innovation boom — SkimNews
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- iShares Biotechnology ETF rose 24% through October 23 after gaining 28% in 2025, with 24 of its 233 holdings more than doubling year to date.
- Moderna gained 587% year to date even after an 18% plunge following a leak of positive clinical data for its cancer vaccine.
- FDA approved about 12 novel biologics out of 46 total approvals in 2025, while roughly 66 novel drugs remained in the pipeline for approval, including potential blockbusters from Moderna, Merck and Eli Lilly.
- Moderna and Merck's tumor-targeted mRNA drug reduced cancer recurrence or death by 42% in Phase 3 when combined with Keytruda; oncologists called the outcome highly positive, and the companies aim to submit it and launch it in 2027.
- Eli Lilly's triple-agonist retatrutide cleared two more clinical trials over the summer, produced 28%-30% weight loss at the highest doses and is planned for an FDA submission in the first quarter of 2027.
- Illumina more than doubled this year as demand accelerated for its NovaSeq X sequencing platform, while 10x Genomics gained more than 300% as its Atera platform produced datasets for AI model training.
- Jeet Mukherjee of BTIG said biopharma dealmaking hit $134 billion in the first half of 2026, exceeding the $112 billion recorded for all of 2025; Eli Lilly separately completed 10 acquisitions worth $25 billion this year.
Why it matters: Drugmakers such as Eli Lilly and Merck have a concrete reason to buy innovation: $180 billion in revenue tied to products losing exclusivity by 2030. Lilly already completed 10 acquisitions worth $25 billion in 2026, while biopharma dealmaking reached $134 billion in the first half, giving biotech developers strategic buyers and leaving the broader sector with richer valuations.
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