5 High-Risk, High-Reward Biotech Breakthrough Stocks to Watch in 2026

Industry Overview - The drug and biotech sector has shown recovery after a weak first half, with large drugmakers like Pfizer, AstraZeneca, Eli Lilly, and Novo Nordisk signing drug pricing agreements with the Trump administration [1] - A rebound in mergers and acquisitions (M&A) has increased investor confidence, with the Large Cap Pharmaceuticals industry outperforming the S&P 500 index over the past three months [1] - Innovation is at its peak, particularly in areas such as obesity, gene therapy, inflammation, and neuroscience, with the FDA approving 41 drugs as of December 15, 2025 [2] Biotech Breakthrough Stocks - Five biotech stocks are highlighted for potential investment: Mind Medicine (MindMed), Ocugen, Keros Therapeutics, Kyverna Therapeutics, and Celcuity, which have shown promising clinical results or have significant upcoming FDA decisions [3][4] - All highlighted stocks have outperformed the industry's increase of 15.3% in the past three months [6] Mind Medicine (MindMed) - MindMed is developing MM120, an orally disintegrating tablet for generalized anxiety disorder (GAD) and major depressive disorder (MDD), with pivotal phase III studies currently enrolling [10] - The FDA has granted breakthrough therapy designation to MM120 for GAD, with top-line data from the Voyage study expected in the first half of 2026 [11] - MindMed's recent financing of $258.9 million strengthens its balance sheet, allowing for accelerated development of MM120 [13] Ocugen - Ocugen is advancing gene therapy programs for retinal diseases, with a phase III study on OCU400 for retinitis pigmentosa (RP) nearing completion and top-line data expected in Q4 2026 [15] - The company plans to file a biologics license application (BLA) for OCU400 in 2026, with a rolling BLA submission starting in the first half of 2026 [15] - Ocugen is also developing OCU410 for geographic atrophy (GA), with data from the phase II study expected in Q1 2026 [18] Keros Therapeutics - Keros plans to initiate a phase II study of KER-065 for Duchenne muscular dystrophy (DMD) in Q1 2026, having received orphan drug designation from the FDA [20] - The company has shifted focus from cibotercept to KER-065, which has shown promising results in earlier studies [20] - Keros has a partnership with Takeda, which is expected to generate near-term revenues through milestone payments and royalties [21] Kyverna Therapeutics - Kyverna's lead CAR T-cell therapy candidate, mivocabtagene autoleucel (miv-cel), is in a pivotal phase II study for stiff person syndrome (SPS), with top-line data showing significant improvements in patient outcomes [22][23] - The company plans to file a BLA for miv-cel in the first half of 2026 [23] - Kyverna is also evaluating miv-cel in generalized myasthenia gravis and has secured a loan facility of up to $150 million to support its pipeline [25] Celcuity - Celcuity has submitted a new drug application for gedatolisib for HR+, HER2- advanced breast cancer, with FDA decision expected in 2026 [26] - Top-line data from the VIKTORIA-1 study showed significant improvements in median progression-free survival compared to existing treatments [27] - Enrollment is complete for the PIK3CA mutant cohort of the study, with data expected in the first half of 2026 [28]