Core Insights - Biotech stocks have experienced a significant rally into 2026, driven by positive clinical data, attractive valuations, an easy money policy, and favorable macroeconomic conditions [1][9] - The iShares Biotechnology ETF (IBB) has outperformed the SPDR S&P 500 ETF Trust (SPY), with a 36.7% increase over six months ending January 7, 2026, compared to SPY's 11.2% [1] - Year-to-date performance shows IBB rising 4.2% while SPY has gained only 0.6% [1] Performance Metrics - IBB has surged 31.1% over the past year as of January 7, 2026, marking a significant turnaround from muted returns of 3.74% in 2024 and 0.97% in 2023 for the MSCI USA Pharmaceuticals, Biotechnology and Life Sciences Index [2] - The Biomedical and Genetics industry has returned 11.7% over the past three months, outperforming the S&P 500's 3.3% [3] Factors Driving the Rally - Biotech stocks are trading at decent valuations, with the MSCI USA Pharmaceuticals, Biotechnology and Life Sciences Index at a forward P/E of 24.36X compared to the broader MSCI USA index at 27.81X as of December 31, 2025 [5] - The PEG ratio for the Biomedical and Genetics industry stands at 1.54X, lower than the S&P 500's 2.06X, with projected EPS growth of 12.14% versus 9.15% for the S&P 500 [5] - The Federal Reserve's three rate cuts in 2025 have created a favorable environment for biotech companies, which typically benefit from lower funding costs [6] Clinical and Regulatory Developments - The FDA approved numerous biotechnology drugs in 2025, including dordaviprone and sunvozertinib, contributing to positive market sentiment [7][8] - A total of 46 drug approvals were recorded in 2025, following 50 in 2024 and about 55 in 2023, with ongoing positive drug trial results boosting stock momentum [8] M&A and Capital Market Activity - Deal volume in the biotech sector reached nearly 70 in 2025, the highest in a decade, driven by Big Pharma's patent cliff needs [11] - Follow-on offerings totaled $10 billion in Q4 2025, the strongest in nearly two years, indicating a revival in capital markets [11] - Biopharma venture investment reached $5.8 billion across 86 rounds in Q3 2025, bringing the year-to-date total to $17.1 billion [11][12] Biotech ETFs - Key biotech ETFs such as Tema Oncology ETF (CANC), S&P Biotech SPDR (XBI), Genomics Immunology and Health ETF (IDNA), and IBB are performing well, hovering around one-year highs [13]

Core Insights - Findell Capital Management has initiated a new position in Mineralys Therapeutics, acquiring 250,000 shares valued at $9.5 million, representing 3.7% of its U.S. equity portfolio as of September 30 [2][6] - Mineralys Therapeutics has seen its share price increase by 246% over the past year, significantly outperforming the S&P 500's 13% gain during the same period [3] Company Overview - Mineralys Therapeutics is a clinical-stage biotechnology company focused on developing therapies for hypertension and cardiovascular diseases, specifically through its proprietary candidate, lorundrostat [5] - The company has a market capitalization of $3.4 billion and reported a net loss of $171.4 million over the trailing twelve months [4][5] - As of the latest market close, shares of Mineralys Therapeutics were priced at $43.36 [4] Financial Performance - Mineralys ended the third quarter with no product revenue and a net loss of $36.9 million, while continuing to advance its drug candidate lorundrostat [7] - The company raised $287.5 million through a recent offering, which has expanded its cash runway and indicated rising institutional support [6] Investment Context - The investment by Findell Capital reflects a high-risk, high-reward profile typical of pre-revenue biotech companies, with a focus on clinical progress and market momentum [6][8] - The company is still in the early stages of its lifecycle, primarily utilizing capital for research and development, manufacturing, and pre-commercial planning [7][8]

Market Performance - iShares Biotechnology ETF (IBB) has rallied 30.2% over the past six months, outperforming SPDR S&P 500 ETF Trust (SPY) which increased by 26.5% [1] - Year-to-date, IBB has risen 15.4% compared to SPY's 13.7% gain [1] - MSCI USA Pharmaceuticals, Biotechnology and Life Sciences Index has shown muted returns of 3.74% in 2024 and 0.97% in 2023, significantly lower than the 25.1% and 27.1% returns of the MSCI USA index in the same years [1] Industry Returns - The Biomedical and Genetics industry has returned 9.35% over the past three months and 4.64% over the past month, outperforming the S&P 500 which gained 6.33% in the last three months and 1.02% in the last month [2] Valuation Metrics - Biotech stocks are trading below the broader market, with MSCI USA Pharmaceuticals, Biotechnology and Life Sciences Index at a forward P/E of 15.92X compared to 23.25X for the MSCI USA index [4] - The Biomedical and Genetics industry has a forward P/E of 19.66X versus the S&P 500's 20.13X, with a PEG ratio of 1.85X compared to 2.31X for the S&P 500 [5] Growth Projections - Projected EPS growth for Biomedical and Genetics stocks is 19.12%, significantly higher than the S&P 500's projected EPS growth of 6.88% [5] Economic Factors - The Federal Reserve's first rate cut of 2025 in September is seen as beneficial for biotech companies, which typically require cheaper funding [6] - Although rates may not return to the extremely low levels of 2020, the current decline is viewed positively for the high-growth biotech sector [6] Regulatory Environment - Recent deals by Pfizer and AstraZeneca with the U.S. government to lower drug prices and avoid tariffs signal potential regulatory relief for the pharmaceutical industry [8][9] - These agreements come amid concerns over potential tariffs as high as 250% on pharmaceutical imports [7] FDA Approvals - In 2025, the FDA has approved several biotechnology drugs, with 33 approvals so far, following 50 in 2024 and about 55 in 2023 [10] Biotech Deal Activities - Biopharma venture investment reached $5.8 billion across 86 rounds in Q3 2025, totaling $17.1 billion year-to-date [12] - Biopharma completed 35 M&A transactions totaling $30.8 billion, along with seven IPOs raising $1.1 billion year-to-date [12] - Licensing in biopharma reached $63.7 billion in quarterly announced value and $183.7 billion year-to-date [13] ETF Performance - Top-performing biotech ETFs in 2025 include ARK Genomic Revolution ETF (up 29.6%), ALPS Medical Breakthroughs ETF (up 24.4%), and others [14]