How to invest in the US biotech sector in 2026? Jefferies: Focus on these 6 preferred stocks, 7 potential targets, and 5 major M&A targets

The Zhitong Finance App learned that Jefferies recently released an outlook report on the 2026 US biotech industry, focusing on the industry's preferred investment targets, underestimated potential companies and potential mergers and acquisitions opportunities. The bank pointed out that in 2026, the biotechnology sector will usher in a number of key clinical trial data disclosures, new drug approvals and policy developments, and segmented racetrack companies are expected to achieve value revaluation through technological breakthroughs and commercialization progress.

The six preferred targets

Jefferies selected six companies as core recommendations for 2026 based on the abundance of market catalysts and valuation potential:

Dianthus Therapeutics (DNTH.US), target price of $66: The lead drug claseprubart (a complement C1s inhibitor) has shown potential in a variety of neuromuscular diseases, including chronic inflammatory demyelinating polyradiculoneuropathy (CIDP), systemic myasthenia gravis (gMG), and multifocal motor neuropathy (MMN), with an estimated peak revenue of $2 billion. In 2026, the company will usher in a number of key points, such as the mid-term analysis of the CIDP phase III clinical trial and the launch of the GMg phase III trial.

Taysha Gene Therapies (TSHA.US), target price $11: Gene therapy TSHA-102 is used to treat Rett syndrome, and the market potential is huge (estimated peak revenue of US$2 billion). Its key advantage is intrathecal administration, which is safer than partial systemic gene therapy. The phase III clinical trial of this core product is expected to disclose 6-month mid-term data at the end of 2026, and the 12-month follow-up data will further reduce project risk.

Tyra Biosciences (TYRA.US), target price of $32: The core asset dabogratinib (TYRA-300) is an oral, highly selective FGFR3 inhibitor with disruptive potential in two areas: moderate-risk non-muscle-invasive bladder cancer (IR-NMIBC) and achondroplasia (ACH). Next year, the company will release key data for two indications: IR-NMIBC and ACH.

Tango Therapeutics (TNGX.US), target price $14: The company collaborated with Revolution Medicines (RVMD.US) to explore the combination of its PRMT5 inhibitor vopimetostat with RAS inhibitors to treat pancreatic cancer (PDAC) with missing MTAP genes, which is expected to achieve the curative effect of “game changing.” This combination therapy data for pancreatic cancer is expected to be disclosed in the first half of 2026.

ORIC Pharmaceuticals (ORIC.US), target price of $23: The company has two major potential assets: 1) ORIC-944, a PRC2 inhibitor for prostate cancer; 2) enzertinib for EGFR exon 20 insertion and pACC mutant lung cancer. The Prostate Cancer Program is a direct counterpart to the Pfizer (PFE.US) similar drug mevrometostat. Next year, ORIC-944 dose optimization data, Pfizer related clinical trial results, and updated Enzertinib data in first-line treatment of lung cancer will be key catalysts.

Solid Biosciences (SLDB.US), target price of $15: The company focuses on the gene therapy SGT-003 for Duchenne muscular dystrophy (DMD) and will hold three key meetings with the FDA in the first half of 2026 to finalize the phase 3 trial design, external controls, and data requirements for an accelerated approval path.

Top 7 underrated companies

The report focuses on screening seven “undervalued stocks” with significant catalysts and revaluation potential, covering segments such as gene editing and rare disease treatment:

Ultragenyx Pharmaceutical (RARE.US), target price of $114: The company's current stock price is discounted, which mainly reflects the value of its marketed products, and 2026 will usher in a concentration of core catalysts, including the end of 2025 to the beginning of 2026. Setrusumab, which treats osteogenesis imperfecta, will release the final phase III data, which is expected to drive up the stock price by 100%; in the second half of 2026, key trial data for GTX-102, Angelman syndrome therapy will also be released. In addition, the company's two gene therapy drugs MPSiIIa and GSD1a are expected to be submitted for marketing in 2026 and are expected to be eligible for priority review, further opening up room for growth.

Beam Therapeutics (BEAM.US), target price $41: The company focuses on the field of gene editing and will update phase I/II data for the AATD treatment BEAM-302 in early 2026. The treatment shows the best potential in its class with a 91% mutation correction rate, and is progressing about 2 years ahead of the competition. Meanwhile, its sickle cell anemia (SCD) treatment BEAM-101 is expected to be submitted for marketing by the end of 2026. The HbF induction rate is over 60%, which is superior to the approved drug Casgevy.

Aurinia Pharmaceuticals (AUPH.US), target price of $21: The core product Lupkynis has maintained steady growth in lupus nephritis treatment, and revenue is expected to reach US$265-270 million in 2025. At the beginning of 2026, the company will announce the clinical development path of aritinercept, a new drug for autoimmune diseases. The drug targets BAFF/APRIL targets and is expected to expand to many types of autoimmune disease indications, bringing a new growth curve to the company.

Kodiak Sciences (KOD.US), target price of $39: a potential dark horse in the field of retinal disease therapy, 2026 will usher in the reading of data from three major phase III clinical trials. Among them, the test results of KSI-101 on MESI indications are expected to drive stock price fluctuations of 40%-60%, and its dual-target inhibition mechanism is expected to surpass similar Roche (RHHBY.US) drugs.

Intellia Therapeutics (NTLA.US), target price of $45: A leading company in gene editing, will release key data on lonvo-z for hereditary angioedema (HAE) therapy in mid-2026. Previously, clinical data showed that 97% of patients had no seizures. Although ATTR therapy is facing clinical suspension, the company's cash reserves of US$670 million are sufficient to support it until mid-2027, and it is expected that the trial will resume through negotiations with the FDA.

Compass Therapeutics (CMPX.US), target price of $8: Focusing on tumor bispecific antibody development, phase II/III durability data for cholangiocarcinoma therapy Tovecimab will be released at the end of the first quarter of 2026. The US market for this indication is about 4 billion US dollars, and the competitive pattern is relaxed. If the trial reaches the main end point of HR <0.7, it is expected to become a second-line treatment standard.

KalVista Pharmaceuticals (KALV.US), target price of $38: With Ektly, the world's first on-demand treatment for oral hereditary angioedema (HAE), stands out, the stock price has risen 80% in 2025. The drug was marketed 1.5-2 years earlier than its competitors, and is expected to achieve rapid growth in patient penetration and revenue in 2026. Peak sales are expected to reach 700 million US dollars, significantly expanding the HAE oral treatment market.

Five potential targets for mergers and acquisitions

Jefferies believes the following companies may be mergers and acquisitions targets in 2026 due to their unique assets or market positions:

Arrowhead Pharmaceuticals (ARWR.US): Has a powerful cardiovascular metabolic RNAi product line and new targets for obesity.

Celcuity (CELC.US): Its drug gedatolisib has shown unique efficacy in Pik3ca wild-type breast cancer.

ORIC Pharmaceuticals: Prostate and lung cancer programs are of high value.

Travere Therapeutics (TVTX.US): If approved for FSGS indications, it will open up a huge market in rare kidney diseases.

KalVista Pharmaceuticals: First-mover advantage and strong growth in oral HAE medications.