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 occur especially when biotech companies report positive clinical results and/or secure 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, so their valuations may rely on estimates of future success.This lack of profitability can lead some biotech companies to issue new shares to raise capital, 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.

What is the next big thing in biotech?

Several advances are top candidates to be the next big thing in biotech, including the use of artificial intelligence (AI) in drug discovery, next-generation gene therapies and gene editing, and personalized cancer vaccines.

5 Best Biotech Stocks for 2026 and How to Invest

By Keith Speights – Updated Sep 14, 2026 at 8:36 PM EST | Fact-checked by Frank Bass

Key Points

Biotech stocks offer growth potential, focusing on disease treatment innovations.
Axsome's revenue boosted by drugs like Auvelity and Sunosi, plus FDA approvals.
Vertex continues dominance in cystic fibrosis and expands with new therapies.

Biotech stocks focus on companies developing new and previously unimaginable ways to treat and prevent diseases. Many of the strongest players pair promising drug pipelines with successful treatments already on the market.

Some scientists believe that we’re in the golden age of biotechnology. If you’re looking to invest in this fast-moving space, a few biotech stocks stand out right now.

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5 top biotech stocks for 2026

The top biotech stocks right now include well-established players that dominate their markets, as well as rising stars. These biotech companies focus on different diseases and use different approaches, but they all have promising long-term growth potential.

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Ticker Information Table
Name and ticker	Current price	Market capMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.
Axsome Therapeutics (NASDAQ:AXSM)	$207.30	$11.3 billion
BioNTech Se (NASDAQ:BNTX)	$96.95	$24.8 billion
Exelixis (NASDAQ:EXEL)	$56.91	$13.9 billion
Mirum Pharmaceuticals (NASDAQ:MIRM)	$93.72	$6.3 billion
Vertex Pharmaceuticals (NASDAQ:VRTX)	$512.53	$131.7 billion

Data as of Sep 15, 2026. Showing 5 of 5 total entries.

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1. Axsome Therapeutics

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NASDAQ: AXSM

Axsome Therapeutics

Premium Feature

Moneyball Superscore

78/100

Today's Change

(-4.29%) $-9.28

Current Price

$207.30

Key Data Points

Market Cap

$11B

Day's Range

$206.00 - $215.02

52wk Range

$112.90 - $260.19

Volume

382.4K

Avg Vol

840.3K

Gross Margin

91.96%

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2. BioNTech

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NASDAQ: BNTX

BioNTech Se

Premium Feature

Moneyball Superscore

68/100

Today's Change

(-1.93%) $-1.91

Current Price

$96.95

Key Data Points

Market Cap

$25B

Day's Range

$95.80 - $97.66

52wk Range

$79.52 - $124.00

Volume

394.2K

Avg Vol

1.2M

Gross Margin

63.87%

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BioNTech (BNTX -2.21%) hit the jackpot with its 2020 collaboration with Pfizer (PFE -0.74%) to develop a COVID-19 vaccine. Although sales of Comirnaty, the vaccine that the two partners market together, 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 developing new vaccines to fight viruses. It's evaluating a combination flu-COVID vaccine in Phase 1/2 testing in collaboration with Pfizer. The company also has other experimental vaccines in its pipeline targeting malaria, Herpes Simplex Virus (HSV), and tuberculosis.

However, BioNTech's big opportunity is in treating cancer. The company's pipeline includes more than 25 phase 2 and phase 3 clinical trials targeting various cancer types.

3. Exelixis

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NASDAQ: EXEL

Exelixis

Premium Feature

Moneyball Superscore

83/100

Today's Change

(1.25%) $0.70

Current Price

$56.91

Key Data Points

Market Cap

$14B

Day's Range

$54.95 - $56.95

52wk Range

$33.76 - $59.72

Volume

950.1K

Avg Vol

2.5M

Gross Margin

96.48%

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Exelixis (EXEL +1.28%) 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 -0.66%) 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 FDA is scheduled to make an approval decision on the drug in combination with Roche's (NASDAQOTH:RHHBY) Tecentriq for previously treated metastatic colorectal cancer by March 3, 2027.

4. Mirum Pharmaceuticals

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NASDAQ: MIRM

Mirum Pharmaceuticals

Premium Feature

Moneyball Superscore

83/100

Today's Change

(-3.13%) $-3.03

Current Price

$93.72

Key Data Points

Market Cap

$6.3B

Day's Range

$93.59 - $97.57

52wk Range

$63.23 - $130.00

Volume

416.8K

Avg Vol

769.4K

Gross Margin

81.65%

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Mirum Pharmaceuticals' (MIRM -3.13%) flagship product, Livmarli, is approved in the U.S. for the treatment of liver diseases where bile flow is blocked or impeded. The drug continues to deliver strong sales growth. Mirum also markets two other products, Cholbam and Ctexli.

The company in-licensed ziligurgisertib from Incyte (INCY -0.68%) in May 2026. The FDA is scheduled to make an approval decision for the drug to treat fibrodysplasia ossificans progressiva, a rare genetic disorder, by Sept. 26, 2026.

Mirum's pipeline also features two particularly promising candidates, volixibat and brelovitug. Volixibat met the primary endpoint of a Phase 2b study targeting primary sclerosing cholangitis, a rare chronic liver disease. Mirum expects to file for FDA approval in the first half of 2027. Brelovitug also met the primary endpoint of a Phase 2b study for the treatment of chronic hepatitis delta virus.

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5. Vertex Pharmaceuticals

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NASDAQ: VRTX

Vertex Pharmaceuticals

Premium Feature

Moneyball Superscore

90/100

Today's Change

(-1.34%) $-6.98

Current Price

$512.53

Key Data Points

Market Cap

$132B

Day's Range

$511.00 - $519.94

52wk Range

$374.17 - $560.25

Volume

380.7K

Avg Vol

1.5M

Gross Margin

86.12%

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Vertex (VRTX -1.32%), 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 big drugmaker completed its acquisition of Crinetics Pharmaceuticals in September 2026. This deal adds another product to Vertex's lineup -- Parsonify, which is approved in the U.S. and the European Union for treating acromegaly, a rare hormonal disorder.

The company awaits accelerated approval 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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How to buy biotech stocks

The following are key steps to take to invest in biotech stocks:

Open your brokerage app: Log in to your brokerage account where you handle your investments. If you don't have one yet, take a look at our favorite brokers and trading platforms to find the right one for you.
Search for your biotech stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
Submit your order: Confirm the details and submit your buy order.
Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.

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Benefits and risks of investing in biotech stocks

The benefits of investing in biotech stocks include:

Significant growth potential
Portfolio diversification with low correlation with the overall market
An opportunity to invest in the development of potentially life-saving treatments

However, there are also risks associated with investing in biotech stocks, including:

The potential for clinical trial failures
The potential for regulatory setbacks
Competitive threats

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Methodology: How these stocks were chosen

The obvious criterion for choosing these stocks was that they had to operate in the biotech industry. Size mattered, too. Only stocks with market caps of at least $200 million were considered.

Most importantly, though, the growth prospects for each stock were evaluated. Although projecting growth for any biotech company is challenging given the inherent risks of drug development, all five of these stocks appear to have strong growth potential.

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Should you invest in biotech stocks?

Reasons to invest in biotech stocks include:

Biotech stocks offer the potential for significant returns.
Some biotech companies have strong financial positions, which lowers their risk.
Biotech stocks can perform well even when the overall stock market doesn't.

On the other hand, reasons you might not want to invest in biotech stocks include:

Biotech companies' drug candidates can prove ineffective, or even worse, in clinical testing.
There's no guarantee that pipeline candidates will win regulatory approvals.
Even if a biotech company's drug wins approval, it might not be successful commercially.
Small clinical-stage biotech companies might have to dilute their shareholders' holdings by issuing new stock to raise cash.

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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, Incyte, Mirum Pharmaceuticals, Pfizer, and Vertex Pharmaceuticals. The Motley Fool recommends BioNTech Se. The Motley Fool has a disclosure policy.

5 Best Biotech Stocks for 2026 and How to Invest

Key Points