Hot Picks: Biotech stocks gain on cancer drugs and trial data

Biotech stocks have rebounded over the past year as improving merger-and-acquisition activity and renewed investor confidence support the sector. Analysts are also watching upcoming clinical trial data and commercial drug launches as potential catalysts for further gains.

BNN Bloomberg spoke with David Nierengarten, senior analyst at Wedbush, about Nuvation Bio, Spyre Therapeutics and Perspective Therapeutics, and why he sees upside tied to lung cancer treatments, autoimmune disease therapies and radiopharmaceutical development.

Key Takeaways

• Increased merger-and-acquisition activity and stronger biotech IPO markets have helped improve investor sentiment toward the sector.
• Nuvation Bio is expected to benefit from longer treatment durations among front-line lung cancer patients using its ROS1-targeted therapy.
• Spyre Therapeutics could see upside if upcoming rheumatoid arthritis data validates its autoimmune treatment platform and TL1A-targeting approach.
• Perspective Therapeutics is developing Lead-212 radiopharmaceutical therapies and related infrastructure for cancer treatment applications.
• Regulatory uncertainty, clinical trial outcomes and slowing acquisition activity remain key risks for biotech companies and the broader sector.

Read the full transcript below:

LINDSAY: Okay, it’s time now for Hot Picks, and today we are zeroing in on the biotech sector. Our next guest is highlighting a California-based company developing cancer treatments. Let’s welcome David Nierengarten, senior analyst at Wedbush. Hi, good morning. Great to have you.

DAVID: Hi, good morning.

LINDSAY: Before we get into your Hot Picks, let’s take an overall look at the sector. Biotech stocks have been rebounding over the last year or so. Can you tell us what the sector and industry look like at this point?

DAVID: Yeah, it’s been a great past 12 months or so. Additional acquisitions and an uptick in M&A have really given a tailwind to the market. Furthermore, some well-received recent offerings, both follow-ons and IPOs, have restored some confidence in the investor group that we can continue to see outperformance here.

LINDSAY: Why was there a lack of confidence before?

DAVID: I think it was the tail end of the declines post-COVID. M&A activity had previously disappointed, along with some of those follow-on and IPO offerings, and the negative momentum continued to spiral. Never mind the volatility in FDA decisions, along with some challenges in interpreting what was going to happen with the FDA, tariffs and other regulatory actions when the administration changed.

LINDSAY: Understood. Okay, let’s get into it then. Your first top pick is Nuvation Bio, trading on the New York Stock Exchange. Tell us more about this company and why you like it.

DAVID: Yeah, so Nuvation is well off its highs, so I think you’re getting a little more value here. What they’re doing is marketing a drug called Ibtrozi in a subset of lung cancer patients who have a particular mutation called ROS1. They launched the drug last year in the third quarter and, in my opinion, the sales have done reasonably well. Importantly, the underlying trend here is the increase in the number of patients being treated in the front-line setting right away. Those patients can be on therapy for four-plus years, and I think the market is underestimating how that is going to stack over several years into the launch as those patients remain on therapy and new patients come on board.

LINDSAY: Next up is Spyre Therapeutics. Tell us more about this one and why it is one of your picks for today.

DAVID: Yeah, so Spyre Therapeutics is a really interesting autoimmune-focused company. They have data coming up for several of their programs, including one called TL1A and another program in rheumatoid arthritis. They’re looking at both inflammatory bowel disease and rheumatoid arthritis. Those data will be coming out midyear and into the second half of this year. They have several catalysts coming up, and the previous data they showed for a different program, but using the same technology they’re developing to extend these therapies’ half-life in the body, looked really good with high exposure and good responses. I think these next programs will also have benefits for patients, and the data are coming up, so investors should take a look at the programs.

LINDSAY: You say you feel the market is undervaluing this company’s opportunity in rheumatoid arthritis. Why is that?

DAVID: Yeah, because I think the focus since the company’s establishment has been on inflammatory bowel disease. I think there’s a lag effect here where people haven’t appreciated the opportunity in rheumatoid arthritis. They also haven’t appreciated that this is a newer target in rheumatoid arthritis, this TL1A target. I think investors are staying on the sidelines a bit to see if the mechanism proves out. But if the mechanism proves out, they’re going to be too late, frankly, because the stock should rally nicely if the data are positive. There are scientific reasons to believe it should work in rheumatoid arthritis, and I think the stock will react favourably when those data come out. The Street doesn’t appreciate it at the current moment.

LINDSAY: Okay, last up, Perspective Therapeutics. Tell us more about this one.

DAVID: Yeah, this is a little bit of a complicated story, but it’s a radiopharmaceutical company. They are developing a newer isotope and radiation therapy for cancer treatments called Lead-212. They’ve had good data in a subset of tumours called neuroendocrine tumours, which are relatively uncommon but appear to be responding well to their therapy with Lead-212. They also have a couple of other programs coming out later this year, one in melanoma and one in tumours that have what’s called FAP as a marker. Those are new programs, and hopefully those data will be positive in the second half of the year and again prove the point that Lead-212 is a viable isotope to use in radiation oncology.

LINDSAY: In our last minute here, what do you think are some of the biggest headwinds for these companies you picked today, as well as the biotech sector as a whole?

DAVID: Yeah, so for Nuvation, for example, that’s a little different because it has commercial products, so any headwind is going to be launch-related. For the other programs, it’s going to be data-related. Generally speaking, for the industry, a headwind would be that we’ve had a nice uptick in M&A, but if pharmaceutical companies pull back from their acquisition trends, that could reduce enthusiasm around the sector. Another thing would be changes in the regulatory regime again causing volatility or changing investors’ assessments of the probability of regulatory success.

LINDSAY: Okay, we’ll have to leave it there. David Nierengarten, senior analyst at Wedbush, thanks for your time. Appreciate you joining us.

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This BNN Bloomberg summary and transcript of the May 11, 2026 interview with David Nierengarten 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.