Hot Picks: Life sciences stocks are seen poised for growth

Life-sciences companies tied to cancer diagnostics, precision medicine and research tools are attracting attention as innovation expands across testing and screening.

BNN Bloomberg spoke with Dan Brennan, senior analyst at TD Cowen, who highlighted three companies spanning liquid biopsy, tissue diagnostics and life-science tools.

Key Takeaways

• Liquid biopsy and blood-based cancer testing are gaining traction as alternatives to traditional tissue diagnostics.
• Expansion into earlier-stage detection and multi-cancer screening is opening new growth avenues in oncology.
• Tissue-based diagnostics remain a dominant and profitable segment, with pricing strength supporting margins.
• Life-science tools companies benefit from diversified exposure across pharma, research and applied markets.
• Sector growth is rebounding after a post-pandemic slowdown, with demand and sentiment beginning to recover.

Read the full transcript below:

LINDSAY: It’s time now for Hot Picks, and today we are looking at three life-sciences plays. Our next guest says they have a strong growth outlook, from oncology diagnostics to tools and medical manufacturing. So let’s bring in Dan Brennan, senior analyst at TD Cowen. It’s great to have you join us.

DAN: Great, thanks for having me.

LINDSAY: Let’s get right to it. Your first pick is Guardant Health. Tell us more about what this company actually does and why you like it.

DAN: Sure. So Guardant is a leader in blood-based cancer testing. They were formed, call it 15 years ago, and their motto is “blood first.” So detecting cancer — historically we’ve done it under a microscope, looking at tissues — that is quickly migrating toward looking at molecular profiles that several of these big, clear labs conduct testing for. Guardant’s methodology has always been to look at blood first, which you can imagine — tissue is the gold standard — to find these cancer signals in blood is not easy. But over the last 15 years, they’ve really optimized their strategy. They benefited from the reduction in costs, and they’ve really seen tremendous growth because of this.

You know, their main market is kind of late-stage cancer testing. Medicare started covering what they call these comprehensive genomic profiling tests back in 2018, and Guardant was a leader there. And now they’ve moved into a couple of other areas — minimal residual disease is detecting cancer at an earlier stage, call it stage two or stage three, rather than wait for it to show up on a scan. You kind of find it in the blood first. And now they’ve moved into healthy screening as well. They have an FDA-approved blood test that will compete with colonoscopy and Cologuard. And they’re also moving into broad-based multi-cancer screening, so they cover kind of the three continuums, if you will, in cancer. The stock did terrific last year. It’s pulled back this year, but we think it’s a really good opportunity at these levels.

LINDSAY: Really important work too. Okay, next up is Caris Life Sciences. Tell us more about this company.

DAN: So Caris is in kind of a similar area as Guardant. It was formed back in 2008 by David Halbert. And Caris has really been situated more in that late-stage cancer testing area, so they’re one of Guardant’s key competitors. They’re the leader in tissue testing. They have a blood test as well — they’re a little bit behind in terms of their market development there, but it’s growing quickly. And they’re also moving into some of the same areas that Guardant is in, in minimal residual disease and also multi-cancer screening. But to date, truly tissue makes up the predominant area of their business.

They were able to secure a really favourable rate. Given their approach is a little more comprehensive than other players, they got a really attractive rate that drove a lot of profitability with that higher price. So they’re actually a profitable company today, and we think their pipeline is really not getting the credit it deserves. The stock is down a lot versus Guardant, which almost tripled last year. Caris, the stock is down last year and this year, and we think the market is not really recognizing the value of their tissue-testing franchise, the durability of their price, their pipeline benefit, and we think the company is looking to expand their sales force to drive more growth. As well, they’re taking a differentiated approach to multi-cancer screening, going after really deep sequencing to provide the highest value. While that might take more time, we think they’re setting themselves up to be a winner in the future.

LINDSAY: Last up is Thermo Fisher Scientific. If you want to go through what this company does as well and why this is one of your picks.

DAN: Sure. So Thermo is a global leader in the life-science tools industry. It’s a wonderful business model — kind of razor, razor blade — you know, themselves and their key peers. They sell instruments that go to a variety of different end markets. Pharma is the biggest, but also academic labs — think of big centres around the world. They also go into applied markets like food testing, environmental testing. They go into diagnostics.

The beauty of their business model is there’s a commonality to their platforms, looking to identify different matrices — it could be in food, could be in tissue — and then separate and identify so they can detect the signal that’s in there. A lot of their products go to R&D, which is probably one of the biggest end markets, or pharmaceutical end markets, but also diagnostics.

The stock has been a terrific performer over the last 15 to 20 years, but over the last three or four years coming out of COVID, there was such a benefit, along with peers, that you had low interest rates, pharma was spending excessive amounts of money, biotech capital creation created really tough comps. So the last three years have been difficult as they’ve climbed out of this tough comp period, and growth has been decelerating. But we think we’re at a point right now, in 2026, where growth has bottomed out, demand is starting to pick up. We think sentiment is still really mixed because the growth acceleration hasn’t happened yet, but you’re getting an opportune time now to get a market leader at a depressed valuation where growth is beginning to accelerate. We think you buy it here before you see that acceleration occur.

LINDSAY: Okay, interesting. We’re out of time, so we’ll have to leave it there. Dan Brennan, senior analyst at TD Cowen, appreciate you joining us. Thanks so much.

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This BNN Bloomberg summary and transcript of the May 1, 2026 interview with Dan Brennan 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.