Is investing in biotech risky?

All investments come with some level of risk. Investing in clinical-stage biotech stocks with no sustained revenue and no profits can be highly risky. However, investing in established biotech stocks with strong financials, a solid product lineup, and a promising pipeline doesn't involve nearly as much risk.

What biotech companies is Bill Gates invested in?

The Gates Foundation Trust, which was formed by Bill Gates and his former wife, Melinda Gates, owns shares of Schrödinger (NASDAQ:SDGR). The company uses a physics-based software platform for drug discovery and development.

What factors influence the performance of biotech stocks?

Factors that influence the performance of biotech stocks include:Clinical trial results.Regulatory decisions.Payer reimbursement decisions.Macroeconomic conditions.Overall stock market performance.Investors' general risk tolerance.Competitors' clinical and commercial success.

Can biotech stocks pay dividends?

Yes, some biotech stocks pay dividends. Notable examples include Amgen (NASDAQ:AMGN) and Gilead Sciences (NASDAQ:GILD).

How do biotech stocks perform during market downturns?

Some biotech stocks can decline significantly during market downturns. However, other biotech stocks can perform well even when the overall market is sinking. This can especially occur when the biotech companies report positive clinical results and/or win key regulatory approvals.

Are biotech stocks suitable for long-term investors?

Biotech stocks can be suitable for some long-term investors. However, whether or not to invest in biotech stocks depends on your risk tolerance. While biotech stocks can be big winners over the long run, they can also experience significant losses over many years.

Why are biotech stocks so volatile?

Biotech stocks are volatile primarily for several reasons:Biotech companies are often unprofitable, which means their valuations may rely on estimates of their future success.This lack of profitability can lead some biotech companies to issue new shares to raise capital, thereby diluting the value of existing shares.Biotech companies can experience significant setbacks with their clinical programs.They face the risk that regulators may not approve their products.

Best Biotech Stocks of 2026 and How to Invest in Them

Best Biotech Stocks to Buy in 2026 and How to Invest in Them

By Keith Speights – Updated Feb 5, 2026 at 12:09 PM EST | Fact-checked by Frank Bass

Key Points

Biotech stocks offer potential high returns from developing drugs and therapies.
Investing in biotech involves risks, such as clinical failures and regulatory hurdles.
Diversified investment options include individual biotech stocks or biotech ETFs.

Some scientists believe that we’re in the golden age of biotechnology. Scientific advances are creating new and previously unimaginable ways to treat and prevent diseases.

Biotech stocks focus on companies developing these innovations, and many of the strongest players pair promising drug pipelines with successful treatments already on the market.

If you’re looking to invest in this fast-moving space, a few biotech stocks stand out right now.

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Ticker Information Table
Name and ticker	Market cap	Dividend yield	Industry
Axsome Therapeutics (NASDAQ:AXSM)	$8.4 billion	0.00%	Pharmaceuticals
BioNTech Se (NASDAQ:BNTX)	$24.6 billion	0.00%	Biotechnology
Exelixis (NASDAQ:EXEL)	$11.0 billion	0.00%	Biotechnology
Regeneron Pharmaceuticals (NASDAQ:REGN)	$82.6 billion	0.46%	Biotechnology
Vertex Pharmaceuticals (NASDAQ:VRTX)	$117.1 billion	0.00%	Biotechnology

Data as of Mar 10, 2026. Showing 5 of 5 tickers.

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1. Axsome Therapeutics

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NASDAQ: AXSM

Axsome Therapeutics

Today's Change

(1.31%) $2.12

Current Price

$164.45

Key Data Points

Market Cap

$8.4B

Day's Range

$161.64 - $165.00

52wk Range

$86.99 - $191.50

Volume

Avg Vol

661K

Gross Margin

91.16%

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Axsome's (AXSM +1.31%) revenue is soaring thanks to strong momentum for two drugs -- Auvelity and Sunosi. The company launched Auvelity in October 2022 as a treatment for major depressive disorder. It acquired sleep disorder drug Sunosi from Jazz Pharmaceuticals (JAZZ +1.69%) in May 2022.

In January 2025, Axsome added a third product to its lineup with the U.S. Food and Drug Administration (FDA) approval of Symbravo for treating migraines. The drug could have significant commercial potential, with current migraine therapies not as effective as desired for many patients.

Other regulatory approvals could be on the way. In December 2025, Axsome filed for U.S. approval of AXS-05 (Auvelity) for the treatment of Alzheimer's disease. The filing for approval of AXS-12 for the treatment of narcolepsy is a key first-quarter 2026 milestone for the company.

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2. BioNTech

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NASDAQ: BNTX

BioNTech Se

Today's Change

(0.65%) $0.66

Current Price

$102.16

Key Data Points

Market Cap

$25B

Day's Range

$98.95 - $102.86

52wk Range

$81.20 - $124.00

Volume

730K

Avg Vol

940K

Gross Margin

82.79%

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BioNTech (BNTX +0.65%) hit the jackpot with its 2020 collaboration with Pfizer (PFE -0.89%) to develop a COVID-19 vaccine. Although sales for the vaccine the two partners market together, Comirnaty, have fallen since the end of the COVID-19 pandemic, BioNTech now has a huge cash stockpile as a result of the vaccine's success.

The German biotech innovator is still working on developing new vaccines for fighting viruses. It's evaluating a seasonal flu vaccine and a combination flu-COVID vaccine in late-stage testing. Both programs are collaborations with Pfizer.

However, BioNTech's big opportunity is in treating cancer. The company's pipeline features more than 20 phase 2 and phase 3 clinical trials targeting various types of cancer.

3. Exelixis

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NASDAQ: EXEL

Exelixis

Today's Change

(2.08%) $0.86

Current Price

$42.41

Key Data Points

Market Cap

$11B

Day's Range

$40.69 - $42.46

52wk Range

$32.38 - $49.62

Avg Vol

2.8M

Gross Margin

96.39%

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Exelixis (EXEL +2.08%) has developed four drugs that are already on the market. Its biggest winner, by far, is Cabometyx, which is approved to treat renal cell carcinoma (RCC) and hepatocellular carcinoma (HC) -- the most common types of kidney cancer and liver cancer, respectively -- as well as thyroid cancer.

Exelixis and big drugmaker Bristol Myers Squibb (BMY +0.51%) won U.S. regulatory approval in early 2021 for the use of Cabometyx in combination with Bristol Myers' immunotherapy drug Opdivo. The company is also evaluating Cabometyx in combination with other drugs in late-stage studies targeting several types of cancer.

The next major growth driver for Exelixis could be zanzalintinib. The company reported positive results in June 2025 from a late-stage study of the drug targeting colorectal cancer. It's also evaluating zanzalintinib in combination with Opdivo in a late-stage study targeting non-clear cell renal cell carcinoma.

4. Regeneron

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NASDAQ: REGN

Regeneron Pharmaceuticals

Today's Change

(3.08%) $23.40

Current Price

$783.26

Key Data Points

Market Cap

$83B

Day's Range

$758.20 - $783.70

52wk Range

$476.49 - $821.11

Avg Vol

822K

Gross Margin

81.56%

Dividend Yield

0.46%

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The biggest moneymaker for Regeneron (REGN +3.08%) is Eylea, an eye disease drug that the company makes in collaboration with Bayer (BAYR.Y +4.15%). All net sales from Eylea in the U.S. are awarded to Regeneron, and the company splits the revenue earned from markets outside the U.S. with Bayer.

Regeneron also has a lucrative partnership with Sanofi (SNY -0.45%), another life sciences and pharmaceutical company. Together, the two companies are marketing and selling the autoimmune disease drugs Dupixent and Kevzara, the cancer drugs Libtayo and Zaltrap, and the cholesterol drug Praluent.

The company won initial approval from the FDA in February 2021 for Evkeeza in treating homozygous familial hypercholesterolemia (HoFH), a rare form of high cholesterol, in patients ages 12 and older. It also picked up an additional approval for the drug in March 2023 for treating HoFH patients between the ages of 5 and 11.

Regeneron also now has another drug in its lineup. The company won FDA approval of Lynozyfic (linvoseltamab) in treating relapsed/refractory multiple myeloma in July 2025. Its pipeline also includes 15 late-stage programs.

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5. Vertex Pharmaceuticals

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NASDAQ: VRTX

Vertex Pharmaceuticals

Today's Change

(0.90%) $4.11

Current Price

$460.80

Key Data Points

Market Cap

$117B

Day's Range

$450.96 - $461.14

52wk Range

$362.50 - $519.68

Volume

139

Avg Vol

1.4M

Gross Margin

86.32%

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Vertex (VRTX +0.92%), which makes multiple cystic fibrosis (CF) drugs, enjoys a monopoly over sales of treatments for the underlying cause of CF. Its dominance in CF was bolstered by the December 2024 approval of Alyftrek.

CF isn't Vertex's only market now, though. The big biotech company is ramping up commercialization efforts for Casgevy, a gene-editing therapy approved to treat two rare blood disorders -- sickle cell disease and transfusion-dependent beta-thalassemia.

Vertex also won FDA approval in January 2025 for Journavx (suzetrigine). This non-opioid drug is the first new type of pain medication approved in more than 20 years.

The company hopes to complete a rolling accelerated approval filing in the first half of 2026 for povetacicept in treating chronic kidney disorder IgA nephropathy. Vertex's pipeline also includes other promising candidates, including inaxaplin, which targets APOL1-mediated kidney disease.

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Biotech stocks FAQ

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About the Author

Keith Speights is a contributing Motley Fool healthcare analyst covering publicly traded companies across pharmaceuticals, biotechnology, medical devices, technology, and marijuana. Prior to The Motley Fool, Keith was CEO of Constant Care Technology, a healthcare technology company; vice president of American HealthTech, a healthcare software company; and a director of operations for Blue Cross Blue Shield of Mississippi, a health insurer. He holds a B.S. in Industrial Engineering from Mississippi State University.

TMFFishBiz

Keith Speights has positions in Bristol Myers Squibb, Pfizer, and Vertex Pharmaceuticals. The Motley Fool has positions in and recommends Axsome Therapeutics, Bristol Myers Squibb, Exelixis, Pfizer, Regeneron Pharmaceuticals, and Vertex Pharmaceuticals. The Motley Fool recommends BioNTech Se. The Motley Fool has a disclosure policy.

Understanding the biotech industry

A biotechnology company uses living organisms such as bacteria or enzymes to make drugs. The use of living organisms differentiates biotechnology companies from pharmaceutical companies, which research and develop chemicals to invent drugs.

Investors should pay close attention to each phase of a biotech company's drug candidates. Drugs in later phases are more likely to succeed, making investing in that company less risky.

There are four major steps and three phases that biotech companies follow to develop new drugs:

Drug discovery: A biotech company first identifies a drug candidate and the diseases that it potentially can target.

Preclinical testing: The company tests the drug candidates in vitro (in test tubes) and/or in vivo (in living animals such as mice).

Clinical testing: The drug candidate is tested on humans. Clinical testing generally occurs in three phases:

Phase 1: Small studies are conducted to find a safe dose for the drug candidate and determine how the drug affects humans.
Phase 2: Larger studies involving around 100 or more patients are conducted with a focus on safety and short-term side effects, and to determine the optimal dose for the drug.
Phase 3: Even larger studies, with hundreds or even thousands of patients, are conducted to demonstrate how effectively and safely the experimental drug treats the target disease.

Regulatory approval: A biotech company must obtain regulatory approval before it can sell a drug. The biotech company files for regulatory approval from the FDA, using the clinical testing data that it has generated.

Most biotech companies have many drugs simultaneously under development, which provides multiple revenue streams. The safest biotech investments are focused on more than just a few experimental drugs.

Many growing biotech companies often generate cash by issuing new shares of stock, which dilutes the value of the existing shares. Some biotechnology companies also receive -- and may be heavily dependent upon -- money obtained via partnerships with larger drugmakers or grants from government agencies and nonprofit organizations. Mergers and acquisitions are common in the biotech sector, which means that any of the most promising biotech companies could be acquired by their larger competitors.

Best Biotech Stocks to Buy in 2026 and How to Invest in Them

Key Points

1. Axsome Therapeutics

Key Data Points

2. BioNTech

Key Data Points

3. Exelixis

Key Data Points

4. Regeneron

Key Data Points

5. Vertex Pharmaceuticals

Key Data Points

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Biotech stocks FAQ

Is investing in biotech risky?

Is investing in biotech risky?

What biotech companies is Bill Gates invested in?

What biotech companies is Bill Gates invested in?

What factors influence the performance of biotech stocks?

What factors influence the performance of biotech stocks?

Can biotech stocks pay dividends?

Can biotech stocks pay dividends?

How do biotech stocks perform during market downturns?

How do biotech stocks perform during market downturns?

Are biotech stocks suitable for long-term investors?

Are biotech stocks suitable for long-term investors?

Why are biotech stocks so volatile?

Why are biotech stocks so volatile?

About the Author

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Our Guides

Premium Investing Services

Biotech stocks FAQ

Is investing in biotech risky?

Is investing in biotech risky?

What biotech companies is Bill Gates invested in?

What biotech companies is Bill Gates invested in?

What factors influence the performance of biotech stocks?

What factors influence the performance of biotech stocks?

Can biotech stocks pay dividends?

Can biotech stocks pay dividends?

How do biotech stocks perform during market downturns?

How do biotech stocks perform during market downturns?

Are biotech stocks suitable for long-term investors?

Are biotech stocks suitable for long-term investors?

Why are biotech stocks so volatile?

Why are biotech stocks so volatile?

Biotech vs. Pharma: What's the Difference?

Best Cannabis Stocks to Buy in 2026 and How to Invest in Them

Best Healthcare Stocks to Buy in 2026 and How to Invest in Them

Best Tech Stocks to Buy in 2026 and How to Invest in Them

Key Data Points

Top biotech stocks to consider

1. Axsome Therapeutics

2. BioNTech

5. Vertex Pharmaceuticals

Understanding the biotech industry

Types of biotech stocks

Should you invest in biotech stocks?

How to invest in biotech stocks

Related investing topics

FAQ

Key Data Points

Key Data Points

Key Data Points

3. Exelixis

4. Regeneron

Key Data Points