Hot Picks: Biotech rebound turns to rare disease catalysts

Biotechnology stocks have rebounded sharply in 2025, pushing the sector back into favour and raising questions about whether momentum can carry into next year as investors weigh clinical risk, regulation and capital discipline. Analysts say rare disease programs with differentiated profiles and near-term catalysts may stand out as markets grow more selective.

BNN Bloomberg spoke with Laura Chico, managing director in equity research at Wedbush Securities, about several biotech companies she says are supported by upcoming clinical data, regulatory decisions and longer-term opportunities in underserved patient populations.

Key Takeaways

• The biotech sector’s strong 2025 recovery has shifted investor attention to whether catalyst momentum can continue into 2026.
• Rare disease indications remain attractive due to high unmet need, pricing power and relatively defined patient populations.
• Investors are increasingly focused on late-stage clinical data and regulatory decisions as key drivers of valuation re-ratings.
• Safety profiles and ease of administration are emerging as critical differentiators in competitive therapeutic markets.
• Pipeline depth and execution, alongside commercial performance, are expected to play a larger role in multiple expansion across biotech stocks.

Read the full transcript below:

ANDREW: Time for Hot Picks. Our guest covers the biotech sector. Her top idea is Viridian Therapeutics. We are joined by Laura Chico, managing director in equity research at Wedbush Securities. Thank you very much for joining us, Laura.

LAURA: Thank you, Andrew.

ANDREW: Start off with Viridian, please. What are they working on?

LAURA: Sure. Well, just maybe taking a step back first, all of our topics here have three themes that really tie them together: rare disease focus, differentiated product and potential catalysts, and that’s exactly where Viridian fits. Their focus is thyroid eye disease, or TED. This is a rare, autoimmune condition that causes bulging, painful eyes.

Your treatment options today are surgery or six months of IV infusions with an approved drug, Tepezza, and Viridian is really hoping to change this treatment dynamic. They have a drug under review right now, veligrotug. We’re hoping to get an approval decision by June, and this would reduce both the number of infusions you need and the duration of each of those infusions.

But I think the really interesting part for Viridian here is what’s next, and that is this quarter we’re getting data from a trial called REVEAL-1 for their next-generation product, VRDN-003. This would be a once-a-month, at-home injection, kind of like an Ozempic pen. So if we see Tepezza-like efficacy in this first-quarter data, I think that’s a real game changer in terms of how we treat TED, but also a re-rating would be due for the stock here.

ANDREW: You said this is a rare disease, though, so the market is curtailed in that sense.

LAURA: Yeah. So we’re talking about fewer than 200,000 patients in the U.S.

ANDREW: Right. So what should investors bear in mind then? Does the margin on a drug like that tend to be bigger?

LAURA: Yeah, and I think Tepezza, even though it hasn’t had significant penetration in the TED market right now — Amgen is marketing this product — it’s at about a $2-billion run rate. So despite the number of patients, there’s still a substantial unmet need in the market for this.

So if we’ve got veligrotug launching kind of the middle of next year, and then hopefully VRDN-003 maybe a year after that, I think there’s still a multibillion-dollar market opportunity just in the U.S. market here.

ANDREW: So Edgewise Therapeutics is your next idea. They carried out a trial and there was some statistical noise, but two patients should, in fact, have been excluded. Can you just walk us through what happened there, please?

LAURA: Yeah. So Edgewise Therapeutics is focused on a cardiac indication, hypertrophic cardiomyopathy, or HCM. This is another genetic cardiac condition. And the idea with EDG-7500, the Edgewise drug, is that hopefully we can dose something that has a safer profile and is easier to administer.

Right now, the standard of care would be Camzyos from Bristol Myers Squibb, a cardiac myosin inhibitor. While it’s changed a lot in how we treat HCM, it’s not without liabilities and some trouble in administration. You have to use echocardiograms to titrate patients. Hopefully EDG-7500 will present a different profile.

We’ll be getting some Phase 2 data from Edgewise, but you mentioned earlier the data last year gave investors pause. At the end of last year, we also got a new safety update from Edgewise. I think a lot of those atrial fibrillation concerns have been alleviated, and the next update in the second quarter will help us understand the efficacy and safety profile a little bit better.

ANDREW: And your final idea here is a company called BioCryst. What are they aiming to fix, or what ailments are they going after?

LAURA: Sure. They are focused on hereditary angioedema, or HAE. This is probably an even smaller market — we’re talking about around 10,000 patients. This is a rare genetic disease where you have random swelling attacks. These can occur in your hands or your feet.

The biggest problem is when they occur in your throat, and those become life-threatening. So patients tend to take a therapy that is administered prophylactically, on a regular frequency, to prevent these attacks. That’s what Orladeyo, BioCryst’s product, does right now.

This is a $600-million-plus drug a year today. I think investors are really concerned about what the tail looks like for Orladeyo — how long it sticks around. There have been recent entrants into the HAE prophylactic space, and I think there are concerns there. We disagree.

We see a path forward for additional growth, and BioCryst recently acquired Astria Therapeutics. They have a Phase 3 program for a long-acting injectable prophylactic treatment that patients would take two or four times a year, instead of having to take injections twice a month, which is the standard right now if you don’t take Orladeyo.

ANDREW: Right. Orladeyo, though, right now is an oral treatment that you take once daily, correct?

LAURA: Yes. So if you don’t want to do injections, I think BioCryst has a really unique offering with the oral product. With Orladeyo, they’ve been showing nice, steady growth, and they’re guiding to over $625 million in revenue this year.

The stock is trading at about two times 2026 consensus revenue, but the mid-cap peer group trades at about five times. Beyond Orladeyo, we do have pipeline updates coming in early 2027 for the Astria program. Another orphan-disease readout is expected toward the end of this year. This is an ultra-orphan skin condition.

I think neither of those are really reflected in the stock valuation. So if we can have commercial execution paired with more pipeline updates, I really like the setup here for BioCryst.

ANDREW: Laura, thank you very much indeed. Laura Chico is managing director in equity research at Wedbush Securities.

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This BNN Bloomberg summary and transcript of the Feb. 5, 2026 interview with Laura Chico 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.