The healthcare sector underperformed broader equities in 2025, but that shouldn't deter investors. Many companies in the industry performed relatively well and appear to be solid buy-and-hold options.
And we're not just talking about the most prominent, best-known healthcare leaders on the market. Plenty of smaller players in the field are worth serious consideration, too.
Let's consider two such companies in the biotech industry: Axsome Therapeutics (AXSM 3.13%) and Exelixis (EXEL 1.17%). Here's why both are worth investing in and holding on to through 2026 and beyond.
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1. Axsome Therapeutics
Over the past few years, Axsome Therapeutics has made slow and steady clinical and regulatory progress. The company's lineup of approved products now features Auvelity for depression, Symbravo for migraines, and Sunosi for daytime sleepiness due to narcolepsy, which it acquired from Jazz Pharmaceuticals.
Axsome Therapeutics still has several upcoming catalysts that will allow it to expand its lineup and generate stronger revenue. The biotech is inching closer to earning approval for Auvelity in Alzheimer's disease agitation, an area with high unmet need, considering the fact that some 5 million AD patients in the U.S. alone experience agitation, but there is only one approved medicine for it. Auvelity could exceed blockbuster status in this indication alone.
NASDAQ: AXSM
Key Data Points
Axsome has other candidates expected to earn approval soon. The company is nearing the submission of an application for AXS-12 in the treatment of narcolepsy. Several other programs are also undergoing late-stage studies. These include AXS-14 in fibromyalgia and Sunosi in ADHD.
Meanwhile, Axsome's top line was pretty strong throughout 2025. Through the first nine months of 2025, the company recorded $442.5 million in revenue, representing a 65.8% increase compared to the same period last year.
And the company's late-stage pipeline candidates could address the needs of millions of patients, including in some areas with few treatment options, such as AD agitation. New launches will help boost revenue and, eventually, enable Axsome Therapeutics to turn a profit. That's what makes the stock attractive to hold over the next five years.
2. Exelixis
Exelixis, a specialist in oncology, relies on a single product for revenue and earnings growth. The company's Cabometyx is approved for use across a range of different cancers, including some forms of liver and kidney cancer. Exelixis is the most-prescribed tyrosine kinase inhibitor (a kind of cancer drug) in renal cell carcinoma, the most common kidney cancer.
The therapy has routinely won more indications and has proved to be a pipeline in a drug. Through Sept. 30, 2025, Exelixis recorded revenue of $1.7 billion, up almost 7.5% compared to the first nine months of 2024. Further, Exelixis has successfully defended its patent rights and shouldn't face generic competition for its crown jewel until the next decade.
NASDAQ: EXEL
Key Data Points
Exelixis successfully establishing itself in a corner of the highly competitive oncology market, dominated by the largest drugmakers, is quite impressive. Exelixis is also working diligently to develop new products, and we can expect to see some progress in this area for the company in 2026. Last year, Exelixis announced strong phase 3 results for its next-gen cancer medicine, Zanzalintinib, in metastatic colorectal cancer.
There is a good chance we will see a regulatory submission relatively soon. This is important. Not only will it allow Exelixis to decrease its exposure to Cabometyx and start planning for life after that patent cliff, but the biotech is also entering a market where there is a high need.
Colorectal cancer is the second-leading cause of cancer death in the world, despite being highly treatable when caught early. But once it metastasizes, current treatment options are mostly inadequate, and Zanzalintinib could help change that. It could generate strong sales for Exelixis over the next decade.
And the biotech will continue to develop newer cancer medicines, given its proven expertise in the field and a lineup that features programs across all stages of development. The stock appears to be a buy entering 2026.
