Hot Picks: Biotech rally suggests bull market may be returning, says portfolio manager

The biotech sector may be entering a new bull phase after a long downturn, driven by easing interest rates, better drug trial outcomes and renewed M&A momentum.

BNN Bloomberg spoke with Eden Rahim, portfolio manager and options strategist at Next Edge Capital, who shared three biotech stocks he believes offer strong upside potential: Legend Biotech, TG Therapeutics and Alpha Cognition — each targeting major disease markets with high growth prospects.

Key Takeaways

• Biotech’s first sustained six-month rally in five years signals a potential shift into a new bull market.
• Falling interest rates, stronger clinical results and rising M&A are reviving investor confidence in the sector.
• Legend Biotech’s CAR-T therapy for multiple myeloma has shown five-year survival rates exceeding 30 per cent.
• TG Therapeutics’ multiple sclerosis treatment is gaining share from a major rival and preparing for a new product launch.
• Alpha Cognition’s Alzheimer’s therapy aims to capture long-term care patients with a safer, better-tolerated alternative.

Read the full transcript below:

ANDREW: Hot Picks. I always love this stock category — biotech. Our guest says the industry endured a four-year bear market from early 2021 until April of this year, but he thinks a bull market is now underway, partly because of lower interest rates but also other forces in the pharma sector. We’re joined by Eden Rahim, portfolio manager and options strategist at Next Edge Capital. Eden, before we get your picks, just very quickly, tell us — why would interest rates be important to the pharma sector?

EDEN: That’s a good question, Andrew, because biotech is typically, or quintessentially, a long-duration asset. You invest heavily in the present and near future in hopes of generating a sustainable, positive cash flow return in the decade that follows. It’s almost like having a zero-coupon bond — very sensitive to changes in interest rates.

So of course, we had that horrible rate-hike cycle beginning in February 2021, where two-year yields went from a quarter basis point to as high as 550 three or four years later. Now that trend is going the other way, which is a real tailwind for a sector like biotech.

ANDREW: Start off with your first idea, if you would — Legend Biotech, LEGN. What are they working on?

EDEN: Legend developed a best-in-class therapy called CAR-T, or chimeric antigen receptor therapy. It works by taking a cancer patient’s T-cells, retraining them to attack a certain kind of cancer — in this case, multiple myeloma — and then reinfusing them. It’s a one-dose treatment. Your T-cells are then trained to produce new T-cells that continue attacking the cancer.

What’s remarkable about their therapy, Carvykti, is that it was first approved about three or four years ago in fourth-line multiple myeloma, then in second-line about a year and a half ago, and is expected to be approved in first-line use within two years. We now have five-year data for Carvykti in fourth-line patients — people who were really at the end of the road. More than a third of those treated have lived beyond five years, which is almost inconceivable. That makes it a functional cure in biotech terms.

Each new approval expands their addressable market by about five times. They’ve been capacity constrained, but that will be alleviated by year-end. They’re partnered with Johnson & Johnson, which expects $5 billion in revenue by 2030. Legend gets half of that. The stock has a $6-billion market cap, $1 billion in cash, and a $5-billion enterprise value. It turns profitable in the fourth quarter with substantial earnings growth from 2026 onward. I think it’s one of the best available values in the space — a growth stock with earnings power the market hasn’t yet recognized.

ANDREW: I’m really sorry — we’re tight for time now. I was too interested in Legend. Give us the quick and dirty on TG Therapeutics, please. Why do you like this one?

EDEN: Sure. TG Therapeutics developed a therapy called Briumvi, which treats relapsing and remitting multiple sclerosis. It competes with Roche’s Ocrevus and is taking market share quickly. We got in around $15, it went as high as $45, and it’s now around $33. It’s expected to generate about $600 million in revenue this year and $900 million next year.

In two years, they’ll get approval for a subcutaneous version, which could double its addressable market to $1.3 billion into the 2030s. We think it’s tremendous value — especially in a risky environment where you want growth stocks that can perform regardless of the economic cycle. These are not economically sensitive names, and they provide a great hiding place for long-term growth investors.

ANDREW: And finally, just give us a quick one on Alpha Cognition as well, please.

EDEN: Sure. Alpha Cognition is actually a Canadian company — a microcap biotech. It recently secured approval for Zunveyl, which treats cognitive symptoms of Alzheimer’s disease. The company is well-funded and expects its launch to really take flight in 2026, targeting the Medicare long-term care market — about a $250-million opportunity.

We think the valuation and visibility are great. Zunveyl has far superior gastrointestinal and insomnia profiles compared with other acetylcholinesterase inhibitors. That should help it take meaningful market share and build strong revenue growth.

ANDREW: Eden, thank you very much indeed. Sorry we didn’t have a lot of time for the second and third ideas. Eden Rahim, portfolio manager and options strategist at Next Edge Capital.

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This BNN Bloomberg summary and transcript of the Nov. 4, 2025 interview with Eden Rahim are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.